Mom Gets Thrown Under The Bus By GM

My mother-in-law is 80 years old. She is an invalid and has lived with my wife and I for the past 3 years. Her late husband was an employee of General Motors, and GM provides a surviving spouse's pension and health care coverage to Mom. At least they will until the new year. Here's the letter Mom received today from GM. It's a real kick in the teeth on top of many of her favorite doctors no longer accepting Medicare. Some won't even accept any insurance at all and have reverted to cash basis only.

Dear Salaried Retiree or Surviving Spouse:

Since the first of this year U.S. market and economic conditions have become significantly more difficult. These conditions, along with the rapid change in automotive industry sales mix, require us to take further actions that will position GM for sustainable profitability and growth. As a result, GM is announcing a change to the General Motors Salaried Health Care Program.

Effective January 1, 2009, GM is canceling health care coverage for salaried retirees and their dependents age 65 or older. Instead, eligible salaried retirees and surviving spouses over age 65 will receive a monthly pension increase of $300. (Diarist note -- Dear Mom: Good luck finding replacement insurance for $300 bucks at your age!)

...

At age 65, medical, dental, vision, hearing aid, prescription drug and extended care coverages provided under the ... Program will cancel.

As if it's needed for anyone with even basic sanity, this is one more reason to elect a Democrat to the presidency this year so we can start fixing the broken-down health care system in this country. We cannot count on "the market" to correct itself, we individual consumers need to elect the right people to fix this major problem. It's too bad Mom probably won't live long enough to see that fix.

•  Tips, Whacks upside the head. n/t

  by edg on Fri Jul 18, 2008 at 07:30:51 PM PDT

  •  Insurance benefits for retirees and their

    dependents should be put fully funded into a trust fund. Something that isn't subject to the whims of the car buying public or the company's solvency.

    by snackdoodle on Fri Jul 18, 2008 at 07:44:01 PM PDT

    •  and what do you do...

      ...when those costs go up in double digit percentages every year?  having a trust fund won't solve that.

      by DawnG on Fri Jul 18, 2008 at 07:53:50 PM PDT

      •  You do what the company I work for does

        it increases it every year for inflation and they OVER fund it by at least 25%.

        by snackdoodle on Sat Jul 19, 2008 at 04:27:51 PM PDT

    •  GM

      What burns me is that GM helped squelch the electric car in the 90s and it is biting them now.   See video:

      http://video.google.com/...

      by not this time on Fri Jul 18, 2008 at 08:15:12 PM PDT

      •  GM helped squelch public transportation

        They bribed officials and rigged bids to have street cars removed from major cities like Detroit and Los Angeles in the middle of last century.

        by edg on Fri Jul 18, 2008 at 08:55:33 PM PDT

  •  I can't understand

    why more business people are not behind a single payer system.  It would save them money and provide their employees better coverage.  Makes no sense.  Then again, not much that the GOP does makes sense to me.  I just can't stand when GOP talking heads are allowed to say that it is socialized medicine.  I thought that socialized medicine was gov't control of the doctors, NOT the insurance companies.

    by rogereaton on Fri Jul 18, 2008 at 07:53:05 PM PDT

    •  when you have good health care....

      its like you are an SUV driver and gas is cheap.  SUV is large and safe and fun, you think.  Others aren't working hard like you and if you drive a small car, you won't get SUV benefits.  SUV benefits aren't that great but you believe that other driving will make you worth less.  They believe the smaller underpowered government health insurance will be inferior and they have an SUV.  So screw you, loser.  They believe the Republican lies.

      by murrayewv on Fri Jul 18, 2008 at 11:41:59 PM PDT

•  This is messed up. For real.

  by icebergslim on Fri Jul 18, 2008 at 07:37:31 PM PDT

•  This is inexcusable. n/t

  by MufsMom on Fri Jul 18, 2008 at 07:49:44 PM PDT

•  Any word shared on the salary level of the CEO

  and/or executive bonuses?  Just read a circulating email today dissing GM management and pointing out that as GM moves work offshore to save those "exorbitant" labor costs in the US, Toyota moves production into the US and eats GM's lunch!  

  I went past a Hummer dealer today; lots of signs about zero interest for six years, or, promising $7000 rebates.  Now I know where they will get the money for that--from your mother-in-law.  More good management from GM.

  by gfv6800 on Fri Jul 18, 2008 at 07:52:35 PM PDT

  •  Apparently

    there will be no executive pay raises this year, and there will be no cash bonuses. In addition, some bonuses were performance-dependent and the targets were missed.

    I somehow doubt any executives will lose their healthcare, though, and also doubt that they ever hear the phrase "your insurance doesn't cover that".

    by sullivanst on Fri Jul 18, 2008 at 08:22:57 PM PDT

  •  Toyota doesn't pay the UAW wages

    GM entire work force is overpaid from the CEO to the BRG (buildings, roads and grounds) people.  RIck Wagoner probably earns about 12M and the office janitor probably makes with overtime $88,000 per year.
    A Toyota worker doesn't not make but $12.00/hr.

    by cwholcomb on Fri Jul 18, 2008 at 08:36:10 PM PDT

    •  Well, I'd say

      that both GM and Toyota are wrong.

      by beemerr on Fri Jul 18, 2008 at 08:41:11 PM PDT

    •  Actually

      The Japanese automakers peg their North American workforce wages to UAW contracts.  Their wages are comparable, which if you think about it, makes sense from a strategy standpoint.  If your workers make less than your unionized competitors, your workers might try to unionize.

      by Linnaeus on Fri Jul 18, 2008 at 08:52:24 PM PDT

      •  Let me add, of course...

        ...that I'm talking about hourly employees.  The diarist's mother was married to a salaried employee.  Different wage structure there.

        by Linnaeus on Fri Jul 18, 2008 at 08:56:15 PM PDT

    •  Is that a good thing?

      Henry Ford started paying his workers $5 a day in the 1920s. The reason? Then they could afford to buy the cars they made. Sounds like your idealized society as epitomized by Toyota has different priorities.

      by edg on Fri Jul 18, 2008 at 08:58:00 PM PDT

•  I like this line:

  take further actions that will position GM for sustainable profitability and growth

  They want sustainable profitability and growth?  They should make better cars.

  That being said I do have a bit of sympathy for the crushing costs GM has had to pay to keep its workers in health insurance.  It was just a couple years ago when the big story was GM having to pay 1 billion (with a B) dollars just on health insurance.  The drastic rises in insurance costs have hit GM pretty hard.  

  Doesn't make the situation any better with you Mom-in-law but there really are no good options for GM right now.

  by DawnG on Fri Jul 18, 2008 at 07:53:16 PM PDT

  •  I Agree

    I am a small business owner and I totally sympathize with GM with the why. My costs for just about everything are going through the roof. However, when you promise a person who put in 40 years with your company that you'll provide them and their spouse with lifetime benefits, you should keep your promise. It's common decency and basic humanity in my view for a person or a company to keep their promises.

    by edg on Fri Jul 18, 2008 at 09:01:41 PM PDT

    •  but that's the thing about business...

      ...and to a greater extent corporations.  As much as they are treated as people from a legal standpoint, they're not people.  They don't have any of the motivations that people have.  They exist solely to make money.  Not to keep their promises, not to be decent, not to serve their employees.

      It's great when you find a company that does, but even then they will only do so as long as they are financially ABLE to.

      by DawnG on Fri Jul 18, 2008 at 09:12:46 PM PDT

•  This is why you need to

  make sure you, your relatives and friends help get Obama elected. Obama's Healtcare program will help your Mom and many people in a similar situation.

  by Chazzg on Fri Jul 18, 2008 at 07:53:46 PM PDT

  •  And myself. I don't have any coverage. n/t

    by edg on Fri Jul 18, 2008 at 09:02:50 PM PDT

•  We need a national...

  single-payer universal health insurance plan, plain and simple.  Kucinich was really the only candidate offering it (but realistically likely wouldn't have accomplished it).  If these types of things must be taken in steps, let's step it up and endorse Obama's plan for health insurance for all, and press forward on it as a "step only" toward a single-payer universal plan.

  by LtdEdishn on Fri Jul 18, 2008 at 07:54:19 PM PDT

  •  right on!! right on!! nt

    by bglv on Fri Jul 18, 2008 at 08:05:58 PM PDT

  •  Agreed

    Obama will make things better. And once his plan is in place, we need to hold his feet to the fire with the numerous statements he's made (quoted in his website's fact check section) that he supports the principle of single payer.

    If the reason that his plan is not single-payer revolves around believing that it's not possible to get single-payer passed right now, we need to insist that he works towards creating the conditions in which it will be passed.

    McCain would make things far worse than now, by eliminating the tax breaks for companies offering health coverage. This will eliminate  group coverage - and leave the insurance companies with no bargaining adversaries to prevent spiralling premium increases and benefit cuts. John McCain would be an absolute healthcare disaster for the vast majority of Americans. I have no doubt at all about that.

    by sullivanst on Fri Jul 18, 2008 at 08:29:10 PM PDT

•  I heard about this yesterday

  I have a close friend whose parents are retired from GM - they're about the same age as your mother.

  It's heartbreaking.

  by cerulean on Fri Jul 18, 2008 at 07:59:01 PM PDT

•  GM is desparately trying to avoid bankruptcy

  It's trying all sort of extreme moves like this to avoid the inevitable.

  by davybaby on Fri Jul 18, 2008 at 08:05:01 PM PDT

  •  cut executive pay and golden parachutes.

    by bglv on Fri Jul 18, 2008 at 08:07:12 PM PDT

    •  heretic!

      You'll be dragged to death behind a GMC Yukon for speaking that! Beg the admins to delete it for you ...

      by Stranded Wind on Fri Jul 18, 2008 at 08:08:23 PM PDT

    •  Hell, fire them all, they are failures

      Oh wait, that's what would happen if the market really worked, silly me.

      by UndercoverRxer on Fri Jul 18, 2008 at 08:15:33 PM PDT

  •  What about the retirees?

    They would like to avoid bankruptcy also and can't rebound and make up for it.  

    by not this time on Fri Jul 18, 2008 at 08:18:22 PM PDT

    •  Good point. Mom's not able to take on a second ..

      job or even a first one at this stage of her life. My gut feeling is that GM will either reduce or eliminate her pension altogether in 2010 or 2011. She's fortunate that we can support her if need be but I hate to think about the ones who don't have a safety net.

      by edg on Fri Jul 18, 2008 at 09:06:44 PM PDT

      •  If they do file Chapter 11,

        she's just another creditor.

        by davybaby on Fri Jul 18, 2008 at 09:25:20 PM PDT

      •  They can't do that

        The pension is separately funded, and I think is actually pretty fully funded, last I looked.  And even if it's underfunded, and they declare bankruptcy, and it goes to PBGC, the oldest pensioners are least likely to see actual cuts in their pension. But I don't think it will come to that - I believe the UAW and auto salaried pensions are pretty secure.

        Retiree health does not have the same kind of protection under ERISA, the Federal pension law - employers are free to cancel it at any time, and they're not required to advance fund it.  They're not allowed the same freedom with pensions.

        by geordie on Fri Jul 18, 2008 at 09:33:56 PM PDT

•  banking disaster, it'll get like this everywhere

   GM is at the front of the implosion because they build stuff that is of no value in a world with declining oil production but make no mistake about it - there are going to be plenty of other folks getting that letter over the next year no matter whom we elect.

  http://theautomaticearth.blogspot.com

  by Stranded Wind on Fri Jul 18, 2008 at 08:10:45 PM PDT

  •  I'm afraid you're right.

    Keep in mind though, a Republican would make it worse while a Democrat would try to make it better or keep it from getting worse. It takes a Democrat to clean up after a Bush. I remember when my bank failed in the early 90s.

    by edg on Fri Jul 18, 2008 at 09:08:31 PM PDT

•  Yeah

  This is really cruel. Odds are that a lot of these elderly people are uninsurable. This is just cruel.

  by oceanstar17 on Fri Jul 18, 2008 at 08:55:39 PM PDT

  •  Nobody would take her on.

    She's got a laundry list of health problems that are, from the perspective of the insurers, a nightmare scenario because they are health problems that won't kill her outright but will require years of regular medical care.

    by edg on Fri Jul 18, 2008 at 09:11:39 PM PDT

    •  Isn't GM helping with that?

      My mom takes 18 medications a day, and has a host of ills - but the consulting firm Ford hired to help retirees through this helped us find a plan.  There was no pre-existing condition issue - my impression was that Ford had contracted with a bunch of companies to take on their retirees.  Who knows how long it will last, of course, but so far, so good in her case anyway.

      by geordie on Fri Jul 18, 2008 at 09:36:37 PM PDT

    •  I feel for her

      I have a pretty significant laundry list of health problems myself, so you and your family have my sympathy and shared anger. I hope somehow that your mother comes out of this financially OK, but I'm not holding my breath.

      by Kitsap River on Fri Jul 18, 2008 at 10:53:26 PM PDT

•  This happened to my mom last year

  My mom is the widow of a Ford retiree - Ford cancelled salaried retiree health insurance, including prescription drug care, as of Jan 1.  They provided quite a bit of help, though, in finding new insurance, through a consulting firm,  and Mom's replacement coverage, for Medigap and joining the Medicare drug plan, came to about $350/month.  Ford only gave single retirees and $1800/year health savings account, though, so your mother in law at least got a bit more cash out of the deal.  Is GM providing any assistance in finding new coverage?  I was glad I was there to help Mom through it,as she was terrified about the whole thing, even though she's got savings enough to get her through. When she first got the letter, she thought they were cancelling her pension as well, and I had to bring her down off the ledge about that.  I wrote some rants here last year at the time.

  It sucks.

  by geordie on Fri Jul 18, 2008 at 09:29:38 PM PDT