Judge approves GM-UAW health care settlement
JIM IRWIN
Associated Press
Posted on Fri, Mar. 31, 2006
DETROIT - A federal judge on Friday approved a settlement requiring union retirees of General Motors Corp. to pay more for their health care.
U.S. District Judge Robert Cleland dismissed the objections of a group of retirees who said the settlement worked out by GM and the United Auto Workers violated their contracts.
Hourly workers approved the settlement by a 61-percent margin in November, but GM needed court approval to go forward with the plan since it involves retirees, who didn't get to vote.
Cleland noted that fewer than 1,250 people out of 476,000 retirees and dependents affected by the settlement objected to it and that the settlement would help keep GM a viable company.
Cleland said "a key objective in the settlement is to address GM's financial struggle and maintain the company's viability, allowing the continued generation of income from which both active employees and retired employees will benefit."
Acknowledging that some retirees would face hardship under the settlement, "the potential loss of all benefits due to ... GM's financial collapse" would be far more harsh for all retirees in its absence, the judge said.
Cleland said opponents' argument that they were not allowed to vote on the settlement was not a valid objection, noting there is "no provision in the UAW Constitution that gives retirees - unlike active employees - a right to vote on the ratification of a collective bargaining agreement."
Under the agreement, hourly retirees would pay deductibles, premiums and co-payments for the first time, up to $752 annually for families and $370 for individuals. Those amounts could rise in the next few years.
The agreement requires active GM hourly workers to contribute part of their future pay increases to a new fund to help pay for retirees' coverage. GM would contribute $3 billion to that fund through 2011.
Hourly retirees can expect to begin paying for a share of their health care by June 1, GM said.
"When we announced last October our tentative agreement on health care with the UAW, we said that it would significantly reduce GM's health care costs while allowing GM to maintain high-quality health care benefits for our hourly retirees," Chairman and Chief Executive Rick Wagoner said in a statement. "This approval allows us to fulfill those important objectives as we continue to rapidly implement all aspects of our North American turnaround plan."
William Payne, a Pittsburgh attorney representing retirees supporting the GM-UAW agreement, said retirees got an acceptable deal in light of GM's years of financial struggle.
"We're not celebrating in a situation where retirees have to pay, but we think it's a fair and good settlement," he said. "When we started (negotiating), another bad headline would come out and it's gotten worse. ... We're happy it got approved when it did."
Source:
http://www.grandforks.com/mld/grandf...s/14236223.htm