Tentative IUE-CWA Pact at GM Improves Retirees' Health Care, Pensions

IUE-CWA reached a tentative agreement Sept. 1 with the new General Motors that provides baseline security for retirees facing health care, life insurance, and pension losses after GM's bankruptcy.

Under the agreement, pre-65 retirees and their dependents covered by GM health plans will be eligible for health coverage funded by $467 million from GM until they are Medicare eligible. Retirees 65 and older who are set to lose health care benefits on Jan. 1, 2010 will retain a $1 billion health benefits claim against old GM, now known as Motors Liquidation Co. IUE-CWA remains on the unsecured creditors' committee to maximize recovery for those retirees. All retirees, regardless of age, will receive a $10,000 life insurance policy.

The IUE-CWA secured an agreement from GM that insures that the pensions of Delphi retirees will remain at the same level after its takeover by the Pension Benefit Guaranty Corporation. Some stood to lose half of their retirement income because the PBGC places some limits on payouts from plans it takes over.

The agreement marks a dramatic turnaround. GM had sought to terminate medical and life insurance coverage for all retirees and their dependents. It also had refused to honor its commitment to protect the pensions of Delphi employees who were former GM employees.

"We were faced with very difficult decisions," said IUE-CWA President Jim Clark. "Every day we hear from severely ill retirees who would literally face a death sentence with the loss of health care, and from retirees who would face bankruptcy if their pensions were slashed.

"Though this package falls short of what our retirees worked years to gain, under these circumstances with two major employers in bankruptcy we are pleased in what we were able to accomplish," he said.