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GM Employees, Retirees Fret Over Insurance Change
By Julia Bauer,
The Grand Rapids Press
October 18, 2005
ArUnion workers and retirees still do not know how much they will pay out of pocket for insurance from General Motors Corp.
But they are sure of one thing: The amount is going up.
GM and United Auto Workers announced Monday they reached a deal to save the Detroit-based automaker $1 billion cash a year in health-insurance costs.
Although details have not been released, officials say GM will save $15 billion in retiree health-care benefits over seven years, a 25 percent cut.
"I would guess they're going to try to change our co-pays and maybe change some of the things they cover," retiree Ron Barkel said.
Barkel, 72, retired from GM's Coopersville plant in 1995, before it was spun off to Delphi Corp.
"I'm concerned about it because I use a lot of medications," he said. "If I didn't have coverage on my medications, I'd probably have to do myself in. But I don't think it's going to be anything that drastic."
Union officials said Monday they plan to meet with local union leaders, then spread the word to members and retirees later this week.
Analysts tallied GM's $1 billion projected savings across the company's 106,000 hourly employees and 321,000 retirees -- per person, it comes to $2,341 each, or nearly $200 a month.
GM has a stamping plant on 36th Street SW in Wyoming. It employs 2,425 workers, including 2,200 hourly.
"I think it's a first step. I don't think that brings them out of the woods," auto analyst Erich Merkle said of the deal.
Still, the deal is a landmark, he said.
"We've come quite a ways, from haggling over a $5 co-pay for prescription drugs, to perhaps a $1 billion savings," Merkle said.
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