Ford-UAW health care deal gets tentative OK
If this and a similar GM plan
win final approval, retired hourly workers would pay for some services.
David Shepardson and Bryce
Hoffman / The Detroit News
March 1, 2006
DETROIT -- A federal judge granted preliminary approval to Ford Motor
Co.'s deal with the UAW to cut the automaker's health care costs by instituting
deductibles and monthly premiums for hourly retirees.
U.S. District Judge Arthur J. Tarnow granted preliminary approval to the deal
in a two-page order.
"The court finds that the proposed settlement falls within the range of
possible approval, does not disclose grounds to doubt its fairness and includes
no obvious deficiencies," Tarnow wrote.
Tarnow will hold a two-day hearing May 31 and June 1 to consider objections
to the deal.
Ford will send details of the settlement to retirees by March 10.
Kathleen Vokes, a Ford spokeswoman, praised the decision Tuesday.
"We're pleased with the court's decision and will proceed with the next
steps," Vokes said.
If the deal at Ford and a similar United Auto Workers agreement with General
Motors Corp. receive final approval, retired hourly workers would begin paying
monthly premiums, deductibles and co-payments for medical services up to a
maximum of $370 a year for individuals and $752 for a family. They don't pay
such fees now.
There are about 150,000 Ford retirees and dependents covered by the
settlement.
Separately, U.S. District Judge Robert H. Cleland will hold a two-day hearing
next week to hear objections to GM's deal to cut $1 billion a year from the
company's health care costs.
More than 1,240 retirees have protested the deal.
Intervention refused
A former recording secretary for the UAW asked Cleland to intervene in the
case.
He refused. Tarnow rejected a similar request.
GM said in a court filing Friday that without reductions in its $74 billion
health care liability, its future is "at serious risk."
Leroy McKnight, who retired from UAW Local 1753 in Lansing, said the UAW and
GM colluded to prevent retirees from having a voice in the decision to cut their
benefits.
Because the UAW cannot negotiate on behalf of retirees, the union and GM are
seeking court approval to ratify the agreement and counter any legal
challenges.
As many as 1,400 retirees and surviving dependents were expected to file
objections with the court. More than 475,000 GM retirees, spouses and dependants
are covered by the settlement.
Mary Hawkins, a GM retiree from Manitou Beach, Mich., wrote an angry letter
to the court before the judge's decision.
"Over the 32 years of my employment with GM, it is not fair to take this
away, as I don't have the option to return to work," she wrote. "Where is the
justice in this?"
Cuts opposed
Richard Romanowski, 61, retired from Ford's Rouge manufacturing complex three
years ago after 38 years at the automaker.
He opposes the cuts.
"We gave up hourly wages for those benefits," he said, adding that he can
remember walking the picket line for $25 a week to win these retirement benefits
and how much his family had to sacrifice.
Only 51 percent of Ford's UAW members voted to ratify the deal, while the GM
deal passed by 61 percent of workers, who voted in November.
Cleland has set a two-day fairness hearing for March 6 and 7 to listen to
objections and may grant final approval.
GM is also reducing health care benefits for salaried retirees and
restructuring its U.S. pension plan for salaried employees.
The automaker plans to cap contributions for salaried retiree health care at
2006 levels beginning Jan. 1, 2007.