The proposed fast-track sale of the productive assets of General Motors Corporation to the “New GM” as part of bankruptcy proceedings calls for the UAW to get notes and GM stock in lieu of $20 billion in cash owed to a heath care trust for retirees. The stock is potentially worth nothing or maybe a fortune if — big if — the company and the economy revive. Even so, it is highly likely that some benefits will have to be trimmed and or eliminated in the future.
For salaried retirees, however, the equation is different. They’re in to get nothing – except the promise from the company that critical benefits will not be cut or eliminated critics say.
“That’s not fair, right or legal,” contends GM Retiree Association president John Christie. “If GM wants a record-speed drive through bankruptcy, we need to make sure salaried retirees aren’t run over on the way to the finish line.”
“It is critical for salaried retirees to have an effective voice through a committee,” said Dean Gloster of Farella Braun & Martel, the San Francisco law firm recruited by the GMRA to watch out for the interest of salaried retirees. “Going through Chapter 11 without representation,” he added, “is like going to a gunfight without a gun and the result would be just as final and predictable.”
GM spokesman Tom Wilkinson said the automaker intends to honor commitments made to salaried retirees. However, GM is working with the U.S. Treasury to reduce some retiree benefits, including executive pensions, company officials acknowledged. The UAW has already agreed to substantial reductions in benefits.