Chrysler cancels life insurance for non-union, white-collar retirees
Unfortunately for Chrysler's army of some 14,000 white-collar retirees, the automaker has announced that it will be cutting the free life insurance that workers were previously covered by. Those affected will be given a one-time opportunity to buy into the plan themselves, which offers coverage equal to their last year of pay if retired before 2003 or $50,000 for those who retired after the cutoff. They're also eligible for receiving a $4,000 bump in their pensions. Of note is that the cancelation does not affect any union-represented workers or retirees. Clearly a cost-cutting measure for the company, we're not sure how much it will actually save Chrysler per year, but apparently it's enough. Since those affected no longer work for the company, Chrysler knows that the move will not affect how its business currently runs, and since these workers aren't unionized, there's not much they can do about it, either.
[Source: The Detroit News]
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Reader Comments (Page 1 of 2)
SPG 7:48PM (4/01/2008)
Work hard until retirment, think you have everything planned.
Then get the rug pulled out from under you.
Ouch.
Still it's better then plants closing and people losing jobs.
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Flashpoint 10:52PM (4/01/2008)
This is the reason Americans need the government in control of Social Security and Healthcare.
As long as you can make the government accountable for these services, you likely don't have to worry that they'll be swindled. But god forbid they are all privatized.
Bush is doing everything he can to change the power distribution of major services, the Federal Reserve and the IRS. One day we will all wake up and realize that while we slept on Fox News and MSNBC and CNN...we were raped.
MajorGeek 11:38PM (4/01/2008)
@Flashpoint, I went to workmens comp once and got screwed physically and financially, trust me bro, Government has NO business experience which is why they can never balance their books, please never forget that. Luckily, I made my own living, and a good one, but few are so lucky. Funny how people would not let the government do their personal budget, or decide where their 401k is invested, yet assume that health care and social security (lol) should be managed by them. Democrats are as corrupt as the republicans, ill be here to say I told you so when you get old. Odd you pick Social Security, which is going broke, too many of you assume the government is a cash cow. Well, when your collecting 200 a week from your wonderful government, you will regret your current decision. You want retirement, try saving your money yourself.
"This is the reason Americans need the government in control of Social Security and Healthcare."
Duders 8:12PM (4/01/2008)
Chrysler is in shambles.
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Jerk Face 8:28PM (4/01/2008)
Chrysler: "Hey, f*ck you guys."
White-collar Retirees: "Awwww....."
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Pete 8:35PM (4/01/2008)
Social security is a joke...pension is a joke...society just wants us to die quickly
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A7C4 2:03PM (4/03/2008)
Ding Ding Ding Ding, You win a prize!
So do you want the AARP pen or the free early bird special at denny's coupon, I know your age group loves coupons!
Galley 10:44PM (4/01/2008)
Where's Carousel when we need it?
JD 8:44PM (4/01/2008)
This is a bit rude. While I think the unions squeeze the auto makers to death (pensions? Come on!), that's the blue collar side, so it seems sort of rude to suddenly take life insurance away. It should phase this in, informing current employees that they will not receive life insurance after retirement so that they can plan for it appropriately. That's the big thing- planning to have life insurance and then having it denied after the fact.
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Aaron O 9:52PM (4/01/2008)
I dont know why you would even care. life insurance is only like $100/month for a very nice package.. so it's not like the white collar people are giong to live in a shack just to have decent life insurance
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Timsvtgen1 10:21PM (4/01/2008)
Those Swines!
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Me Too 11:23PM (4/01/2008)
What can you do? Putting all eggs in one basket has its risk.
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RockStoneSteel 11:24PM (4/01/2008)
I wouldn't necessarily say there is nothing retirees can do about it. If it was agreed upon during employment that Chrysler would provide this benefit until death, then they may have a legal obligation. If Chrysler provided it simply as a "bonus" with no long term legal/contractual obligation to retirees, then the retirees sincerely have no right to it.
Society has a serious sense of entitlement and folks often think that everyone else is obligated to provide for them. Those benefits are not free and they require resources that come out of someone else's pocket. So instead of everybody paying for someone else, why not just keep it at home and take care of yourself.
And contrary to Flashpoint above, we need to privatize retirement and benefits, but with extreme government oversight. If I could have invested every penny that my employers and myself contributed to social security and medicare, I could have retired a wealthy man. I do agree that the bad scenario is to continue letting corporations manage our retirements and health care.
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psarhjinian 11:39PM (4/01/2008)
While it is early on in his tenure--perhaps too early to comment--I think it might be worth noting that Bob Nardelli's salary and bonuses would be a sufficiently high percentage of this savings.
Schrempp and Zetsche certainly got payouts that would have covered much of this, and they're basically responsible for trainwrecking Chrysler.
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MajorGeek 11:42PM (4/01/2008)
Bottom line as I have mentioned before. With Ford and GM busting their asses, Dodge has nothing but butt ugly designs and interiors, maybe someone should buy them and end this, otherwise they need a new design team. No one wants these ass ugly vehicles.
Sad thing is they marketed the Hemi so damn well, then follow up with Avenger, Caliber, Journey and all those ugly designs and dont get em started on the new toaster looking minivan. Close up in 3 months, my Challenger will be worth a friggin fortune!
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Mal Fuller 12:02AM (4/02/2008)
Too bad retirees can't take out a cheap term life policy on Chrysler, naming themselves as the benificiary. Their future would then be secure.
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Miguel 2:51AM (4/02/2008)
What is with all the negativity? They aren't dropping pensions or anything; they are cutting life insurance--y'know, the kind you can buy for pennies a day to cover the cost of your funeral in the event that you die. And then there's a chance for $4000 bump in your pension. That might more than cover your premiums for a decent life insurance policy.
Kudos to Cerberus--no more freebies and without even SCREWING the employees as much as everyone seems to think.
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cowboy bob 7:14AM (4/02/2008)
Miquel- You obviously are a young man. I know, as a senior citizen, that it is impossible to buy life insurance of any substance for 'pennies a day". The payout is a pittance, and so restricted, that getting anything close to a funeral expense is a joke. The fact is that these people worked for a company that included this as a partial return for their service. They then decide, after the employee has lived up to their end of the bargain, to re-nig on the deal. There is no protection for the former employee here, but a class action suit, or government intervention. They had some agreement, and Chrysler broke it. It's that simple. Wether you think they deserve it or not is irrelevent. If Chrysler did not want to continue this, make it for current employees, and leave those who earned this benefit alone.
John haigh 8:57AM (5/31/2008)
Chrysler promised certain benefits in order to get employees to accept their early retirement offer. I, as many others, accepted their offer. I signed their contract offer and now I expect them to live up to their end of the agreement. Does anyone know of a class action law suit against Chrysler as a result of this life insurance cancellation? They have already reneged on their health care insurance by forcing us to now make large co-payments.
Drewboy 7:12AM (4/02/2008)
As an insurance agent, this is exactly why you buy a policy of your own as well - you can't count on your employer or ex-employer to keep their end of it in force for you.
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