Tuesday, February 24, 2009
NEW YORK (AP) — Nancy Shade’s father and grandparents had enjoyed the security of General Motors’ benefits before they helped draw her to a job there, too. Now, the five-year breast cancer survivor is wondering how she’ll afford her own health coverage if GM’s spun-off parts maker, Delphi, terminates medical and life insurance benefits for salaried retirees.
Delphi Corp., which has been under bankruptcy protection since 2005, has asked a judge to allow it to cancel the benefits as soon as April 1, so the Troy, Mich., company can save more than $70 million a year and take more than $1.1 billion in liabilities off its balance sheet.
More than 75 Delphi Corp. retirees like Shade have written directly to U.S. Bankruptcy Judge Robert Drain, begging him to keep them from joining the ranks of the uninsured. Attorneys representing at least three groups of retirees have filed formal objections to the plan.
A hearing on Delphi’s motion is scheduled for today in New York.
About 15,000 of Delphi’s salaried retirees and their surviving spouses rely on the company’s medical coverage until they can qualify for Medicare at age 65.
Delphi has recognized that the cuts are painful, but says in court filings that they are needed if the company ever wants to emerge from Chapter 11 protection. Previous reorganization plans didn’t account for the steep drop in vehicle sales late last year that has slashed demand for auto parts.
Jim Conger, who spent 35 years with General Motors Corp. and Delphi as a maintenance supervisor in Saginaw, Mich., is part of a group that has hired a Chicago-based law firm to challenge Delphi’s request. He also set up a contact e-mail address (salaryhelp@hotmail.com) for other retirees to get involved.
“The thing that has scared me as I’m sitting here and watching the e-mails float in, are the horror stories of the mothers, daughters, fathers and sons that have pre-existing conditions and don’t stand a chance of having another carrier pick them up,” Conger said. “If they don’t stay with Delphi, they’re in deep trouble.”
Douglas Bernstein, managing partner of law firm Plunkett Cooney’s Banking, Bankruptcy and Creditors’ Rights Practice Group, said the complete elimination of retirement benefits is an exceptionally drastic move.