What Happens To Retired Auto Workers Now? The grim situation in the auto industry has current and former workers concerned. Retired auto workers and those who took a recent buyout are wondering whether their pensions and health benefits are in jeopardy.

What Happens To Retired Auto Workers Now?

What Happens To Retired Auto Workers Now?

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The grim situation in the auto industry has current and former workers concerned. Retired auto workers and those who took a recent buyout are wondering whether their pensions and health benefits are in jeopardy.


We've heard a lot about the hundreds of thousands of people that could lose their current jobs if the Big Three automakers collapse. But there are nearly as many people already retired who count on GM, Chrysler, and Ford for their pensions and their healthcare coverage. NPR's Celeste Headlee reports.

CELESTE HEADLEE: For retirees from the Big Three, these are scary times.

Ms. MICHELLE KREBS (Editor, Edmund's Autoobserver.com): People are afraid. There is no two ways about it.

HEADLEE: Michelle Krebs is editor of Edmund's autoobserver.com. She says there are perhaps tens of thousands, maybe more, who've taken voluntary early retirement packages from the domestic automakers.

Ms. KREBS: And that number is continuing to increase because every day, there are new buyouts being offered.

HEADLEE: Over the past few years, automakers have slashed their workforce dramatically, partly through early retirement for people who had put in 30 years or more. But Don Grimes of the University of Michigan says retirees under the age of 65 will see their pensions cut dramatically if the Big Three go under, and they won't be eligible for Medicare either.

Dr. DON GRIMES (Institute of Labor and Industrial Relations, University of Michigan): That means that people are going to have be shelling out four or $5,000 a year to pay for their health insurance benefits.

HEADLEE: Grimes says it will be disastrous for the already struggling Midwest states.

Dr. GRIMES: And it would be a catastrophe in Florida as well, where a lot of the retirees have moved.

HEADLEE: Frank Geneky(ph) worked for 30 years at General Motors in Michigan before taking early retirement this year.

Mr. FRANK GENEKY: I can't go back and relive these 30 years that I've put in with the company.

HEADLEE: Geneky says he's afraid that he may never collect the pension that he spent decades earning.

Mr. GENEKY: The whole state is worried because everybody in the whole state knows somebody that's going to be affected by it or would be affected this.

HEADLEE: He says he's looking for work, but it's not easy.

Mr. GENEKY: I am just hoping that in Michigan, with 9.3 percent unemployment, that I can find another job.

HEADLEE: Geneky was a member of the UAW, but non-union autoworkers are feeling it, too. Paul Bardus(ph) is in his 50s. He worked for Ford as a power train engineer for 20 years. He took early retirement last year. Bardus says he understands the fear of his fellow retirees.

Mr. PAUL BARDUS: I share their concern, but, you know, in my personal situation, what are we going to do, worry about it? We're going to take one day at a time.

HEADLEE: Bardus says he's infuriated over the national debate that's raging about whether or not to offer bridge loans to the Big Three.

Mr. BARD: Why don't Americans care from coast to coast about other Americans?

HEADLEE: He says most people probably don't appreciate the scope of the problem and seem insensitive to the plight of the autoworkers, the retirees, their children, and their grandchildren.

Mr. BARDUS: Are we doing that because we were jealous because they had good benefits, they had good retirements? Is that the reason why people feel the way they do?

HEADLEE: Bardus took a job at a Japanese parts supplier for a while, and now, he's back in the market hoping to find work to supplement his pension or replace it if necessary. Michelle Krebs of Edmund's AutoObserver says there will soon be tens of thousands of people trying to return to work.

Ms .KREBS: These are people are going to be in the job market. The big question is, where are the jobs?

HEADLEE: Krebs says they won't all find jobs with the foreign automakers, who are also struggling, and even markets overseas like Brazil and China are in tough shape.

Ms. KREBS: They don't have a different geography to go to, and they don't necessarily have a different industry to go to.

HEADLEE: Krebs says it'll cost the government billions to absorb retirement benefits for former autoworkers and much more for healthcare.

Ms. KREBS: Taxpayers will pay one way or another. They can pay upfront the bridge loans that hopefully will make it a little more orderly, or the car companies fold, and it is chaos.

HEADLEE: Don Grimes of the University of Michigan says the stakes are high, and that's why current autoworkers must be ready to make concessions in order to get the Big Three back on track.

Dr. GRIMES: If they don't make every effort and give up anything to get these companies to continue in business, the retirees are going to lose tens of thousands of dollars a year in benefits if they're under 65.

HEADLEE: Grimes says there will almost certainly be new contract negotiations that accompany federal aid, and he has a message for current autoworkers.

Dr. GRIMES: Costs for everybody concerned could be catastrophic. So, think very carefully on what you are doing and look at it with a clear and open mind.

HEADLEE: He says the current economic crisis is already sparking a national debate over banking regulation and healthcare. Now, you can add pensions into the mix. Celeste Headlee, NPR News, Detroit.

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