Tonawanda News

Business

February 24, 2009

DELPHI: Retirees fighting firm's request to cancel benefits

Retired salaried workers from Delphi Corp. are uniting against the company’s effort to cut health and life insurance benefits, for which a court hearing on the matter is scheduled today.

Delphi, under bankruptcy protection since 2005, has asked a judge to allow it to cancel the benefits as soon as April 1, so the company can save more than $70 million a year and take more than $1.1 billion in liabilities off its balance sheet.

There are more than 15,000 Delphi non-union, salaried retirees, including some in Lockport. The Associated Press said Delphi currently provides medical and insurance benefits to retired salaried workers and surviving spouses under age 65. Delphi is asking the court to make two major changes:

• Salaried active employees and retirees hired before 1993 currently receive health insurance until age 65, when they become eligible for Medicare. Once they are eligible for Medicare, Delphi makes available retiree health reimbursement accounts that can be used to purchase supplemental insurance. Delphi is asking the judge to cancel both the health insurance and supplemental benefits.

• Workers hired between 1993 and 2000 are not eligible for Delphi-paid health insurance benefits in retirement, but 1 percent of their salary is contributed to a savings program that they can use to pay for health care. Delphi is asking the judge to cancel the contribution.

Salaried workers hired after 2000 don’t receive any kind of health care benefits after they retire, but they can buy health insurance through the company if they pay the total cost. Delphi isn’t asking for any changes for those workers.

Some retirees aren’t taking this laying down. The Delphi Salaried Retiree Association was formed after Delphi made its motion to terminate the benefits. The Indiana-based retirees group, which says it is also representing their spouses, survivors and dependents, has more than 2,378 members as of Sunday night. The group has hired a San Francisco-based law firm, Farella Braun and Martel, and has filed a formal objection in bankruptcy court asking for the right to set up a salaried retirees committee to participate in the case. Such a move would give salaried retirees a voice in the Delphi bankruptcy proceedings.

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