As part of the $15 billion liquidity improvement for General Motors (GM - Get Report), starting Jan. 1 health care for the over-65 retiree will be cut and substituted by a monthly increase to the pension.
That's a lot of people who have just lost health-care coverage -- many elderly, some sick, and most of whom thought they wouldn't have to think about health insurance ever again in their lives.
Michelle Bunker, GM health-care communications manager, said it took the decision to increase the pensions of the eligible retirees because it gave them more flexibility.
GM, along with the rest of the U.S. auto industry, has been struggling mightily of late as demand for high-profit-margin SUVs flags amid high gas prices and auto makers such as Toyota (TM - Get Report) and Honda (HMC - Get Report) produce more technologically advanced and appealing lineups. In fact, many people think the company is bound for bankruptcy in the near future.But the company's woes are hurting real people, too. Jack Dickinson, a retiree with 34 years of sales and marketing experience, presides over a GM retiree group, Over The Hill Car People, which has been overwhelmed with calls and emails from concerned retirees. He says that retirees were very angry about the announcement, and noted that "we have some really sick folks undergoing chemo at the moment," among others for whom this could be fairly traumatic. Dickinson says, "They could have and should have included retirees in the discussion. Calls to GM are not being answered, just receiving a recorded message -- no further information." Letters received by GM retirees last weekend from Kathy Barclay, vice president of global human resources, state that GM will be holding meetings all over the country with retirees from September to December to answer questions. She emphasizes that "General Motors is absolutely committed to assisting the impacted retirees, surviving spouses and dependents."