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Salaried Retirees Seek Voice

Chuck Austin, President
National Chrysler Retirement Organization
In Government Loan Process


The representatives of non-union retiree groups at Ford, Chrysler, General Motors and supplier Delphi have petitioned President Barrack Obama’s Auto Task Force to consider salaried retirees when taking the next important steps in the federal government’s loan assistance plan.


Saying that their concerns have been unheard in the process thus far, the four groups are seeking an audience via a letter sent March 24 to Treasury Secretary Timothy Geithner and National Economic Council Director Larry Summers.  Although there are some 200,000 salaried non-union retirees in the automobile industry, they are loosely affiliated and have no political connections, nor broad-based support on Wall Street or in Washington D.C. like other constituents that are expected to be a part of the negotiation process of cutbacks, such as bondholders, unionized employees, dealers and suppliers.


“Retirees – especially salaried retirees -- have no seat at the table,” explained Chuck Austin, President of the National Chrysler Retirement Organization, one of the letter co-signers.  “We all agree that equality of sacrifice in an important part of this process, but we’re concerned that this large segment has had no voice whatsoever.”

 

Other organizations signing the letter include FAIR Alliance Inc (Ford Actions Impacting Retirees), Don Whitehouse, President;  the GM National Retiree Group, Jack Dickinson, President; and the Delphi Salaried Retirement Association, Den Black, Interim Chair.  Their members include administration, clerical, professional and executive retirees.


The letter states that these non-union retirees have shouldered a large part of the burden of cutbacks already seen by the industry.   “Since 2006, the Detroit 3 (Chrysler, Ford and GM) have reduced or eliminated life insurance, have terminated healthcare insurance for non-union retirees on Medicare and have instituted cost sharing provisions far in excess of those imposed upon union represented employees and retirees.  Further, Delphi, a major automotive supplier, recently eliminated health insurance and early retirement benefits for all of its non-union retirees as a condition of its bankruptcy restructuring.”

The organizations are jointly pursuing legislative action in partnership with the National Retirees Legislation Network and other retiree advocacy groups to protect the pensions and benefits of retirees, and have met with several members of Congress over recent months.


See the following pages for the full letter.

March 24, 2009

Mr. Timothy Geithner, Treasury Secretary
Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, D.C. 20220


Mr. Larry Summers, Director
National Economic Council
1600 Pennsylvania Ave NW
Washington, DC 20500

Dear Mr. Geithner and Mr. Summers:

First, let us introduce ourselves.  We are the Presidents of the Chrysler, Ford, GM, and Delphi, salaried non-union retirement organizations.  As a point of information there are more than 200,000 salaried non-union retirees in the automobile industry. Our members include administrative, clerical, professional and executive retirees.

 

As you know, the number of retirees is growing rapidly and approximately 50% of our nation is now over the age of fifty.  A large number of future retirees will be non-union.  However because salaried retirees are not unionized and are loosely affiliated, their concerns go unheard.
 

To better understand our perspective you must realize that, just like their union counterparts, non-union workers contributed greatly to building our economy and this nation.  We worked countless hours of overtime, often without compensation, helping to strengthen and build our companies.  We earned our pay and benefits over the years sacrificing our time and our family life in the belief that we would be able to have a secure retirement for ourselves and our families.  We were promised a secure retirement by our companies.  However, they have not kept their promises.  

 

In the past few years, the trend to reduce the benefits of non-union employees and particularly retirees has increased dramatically.  Since 2006, the Detroit 3 (Chrysler, Ford and GM) have reduced or eliminated life insurance, have terminated healthcare insurance for non-union retirees on Medicare and have instituted cost sharing provisions far in excess of those imposed upon union represented employees and retirees.  Further, Delphi, a major automotive supplier, recently eliminated health insurance and early retirement benefits for all of its non-union retirees as a condition of its bankruptcy restructuring.
 

It is evident non-union retirees are facing an economic tsunami.  Our investments have been devastated by a precipitous drop in the stock market and employers are abandoning non-union retirees by eliminating as many benefit programs as possible for cost cutting purposes.  As a consequence, non-union retirees face rising medical costs on fixed incomes and devastated savings.  In addition non-union retirees face an uncertain future relative to their pensions.  The domestic automobile industry is in the midst of a massive restructuring and needs federal loans to stay solvent. Consequently, not only the survival of the companies is at risk but also the pensions of all retirees.

We recognize that legislative action will ultimately be required in order to truly protect the pensions and benefits of retirees.  Our retiree organizations are pursuing this objective in partnership with the National Retirees Legislative Network and other retiree advocacy groups.  However, non-union retirees in the auto industry cannot wait.  

 

GM and Chrysler are seeking government loans to avoid bankruptcy and Delphi is already in bankruptcy.  Further, there are a long string of automotive suppliers approaching bankruptcy, many of whom are also seeking federal loans.  It is clear the Treasury Department and the Automotive Task Force have concluded that the domestic automobile industry needs significant restructuring in order to be competitive with foreign automakers. Policies and procedures are being implemented to address the competitiveness issue.

We believe any policies and procedures put in place should represent equality of sacrifice.  However, it is clear that non-union retirees have given up far more of their benefits and security than the any other group.  All retirees should be treated fairly which is why we believe the concerns of non-union retirees need to be addressed as part of any restructuring efforts with GM and Chrysler as well as with any restructuring efforts associated with Delphi’s bankruptcy.

Non-union retirees are not seeking a lucrative benefit package but rather only that our economic fate is secure in retirement through basic protection that insures the safety of our pensions and provides decent health care and life insurance protection for ourselves and our families.
 

Non-union retirees are especially concerned that:
Detroit 3 and Delphi non-union retiree benefits should be maintained and the Auto Task Force should provide funding for this purpose.  The Detroit 3 have already lost their retiree benefits and Delphi stands to lose theirs in bankruptcy court in April.
 

The sacrifices of the Detroit 3 non-union retirees be acknowledged and as the financial positions of these companies improve they should be compelled to enhance the non-union retiree benefits that remain. Pension plan funding should be placed above all other creditors when negotiating among stakeholders.  Further, pension plans must not be allowed to default and companies should be required to disclose the financial status of their pension plans, and be required to fully fund their pension plans as part of any restructuring plan.

      Pension funds be used for their intended purpose and not be permitted to be used to finance employee buy-outs. Such buy-outs should come from general operating funds.

      The PBGC should be required to accept the pension plan valuation methods used by Corporate America and required by the SEC and ERISA as the basis for any pension entitlement calculations in the event of a company bankruptcy.

      Supplemental benefits, including healthcare and pension supplements, for early retirees are maintained during a company’s restructuring effort.

      Those retirees on Medicare who have lost their company sponsored healthcare be provided catastrophic coverage that will limit their out-of-pocket cost for healthcare expenses to prevent the risk of retirees being devastated financially due to such expenses.

      Some basic level of life insurance coverage should be maintained.
 

Such action by the Treasury Department and the Auto Task Force will not only help non-union retirees from the Detroit 3 but it will also set the precedent for subsequent automotive suppliers that seek federal funds or file for bankruptcy.
 

The Task force has met with all the GM and Chrysler stakeholders including union represented employees/retirees but has not seen fit, as yet, to meet with non-union retiree representatives. Consequently, we do not believe the concerns of non-union retirees have been addressed.  Therefore, we request that we be permitted to meet with the Task force so that we can address these concerns in more detail.  Thank you for your consideration in this matter.

Sincerely,


Chuck Austin, President
National Chrysler Retirement Organization
Phone: 248-892-4984 cell
E-mail: chuckaustin@comcast.net
 

Don Whitehouse, President
FAIR Alliance Inc. (Ford Actions Impacting Retirees)
Phone:  270 871-6037
E-mail:  donlwhitehouse@aol.com

Den Black, Interim Chair
DSRA (Delphi)
Phone: (757) 262-9925 cell, (757) 436-2347 home
E-mail:  denblack@cox.net

Jack Dickinson, President
GM National Retiree Group - OTHCP
E-Mail: spoacdc1@aol.com


 


 

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