Auto:
Moving against retirees' health care

Mar 21, 2005

Delphi Corporation, the spin-off parts division of General Motors, announced that it would stop paying for salaried retirees' health insurance in 2007.

Delphi said that it will set up private "Medigap" insurance accounts that retirees will have to buy if they are to cover the difference between their current benefits and the low Medicare benefits.

As companies always do, Delphi said health insurance was costing them too much money.

But why target the year 2007? Is it just a coincidence that 2007 is a contract year for the UAW at the big automakers? Delphi is setting the stage for the automakers to claim that UAW hourly retirees have to take the same cuts as the salaried workers.

If any retiree in auto has believed that their medical benefits are guaranteed for life, Delphi just put up a big red warning flag.

And here is the second warning flag for retirees of the auto companies: the UAW International has not counterattacked the Delphi proposal. Union leaders have not sent out the alarm to the union membership. No exposure of the companies' game. No call on the union's membership to get ready, to prepare for the necessary battles ahead.

It's this second warning flag that retirees, and all those who hope one day to become retirees, must take seriously. If the union fails to respond today – including by allying with salaried workers – it will only encourage all the companies to carry out this attack.