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Retiree Health Benefits Tied To GM Peformance

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Retiree Health Benefits Tied To GM Peformance

Economy

Retiree Health Benefits Tied To GM Peformance

Retiree Health Benefits Tied To GM Peformance

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As part of the deal between GM and the UAW, union retirees will lose their dental and vision benefits. Health care coverage will remain intact, but GM stock will cover half of the $20 billion health care trust fund for retirees. That means long-term health benefits for retirees are directly tied to the fortunes of GM when it emerges from bankruptcy.

RENEE MONTAGNE, host:

And back now to NPR's Frank Langfitt for some analysis. And, Frank, given what we've just heard, how much do GM retirees really have to worry about their health care benefits?

FRANK LANGFITT: Well, you know, in the next couple of years, they probably should be okay. There is enough money. And also, keep in mind that they still have a lot better health care than most Americans, a lot of Americans. Only in recent years did GM workers actually begin to pay premiums.

STEVE INSKEEP, host:

But when you look at what David Schaper just said - that health benefits are tied into the performance of the company - that must be changing the relationship between GM and its workers and retirees.

LANGFITT: I think the retirees are probably more concerned about the profitability of the company than ever, and they really have to hope that this company does well because it's so tied up in the stock.

You know, if Ray Young is right, things will, you know�

INSKEEP: The GM executive we heard from.

LANGFITT: Yes. Then health care will be there for them. But if he isn't, they could be in for deeper and deeper health care cuts.

INSKEEP: Frank, thanks very much.

LANGFITT: Happy to do it.

INSKEEP: NPR's Frank Langfitt covers the auto industry.

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