Article 43


Sunday, March 20, 2005

PBS Special on Retiree Health Care Coverage

If you’re retired and your former company is paying all or part of your health benefits-coverage you think you’ll have for life-then you might want to dig out your old paperwork, put on your glasses (while you can still afford them) and read the fine print.  Why?  It may depend on what your definition of lifetime is.  More and more retirees are finding themselves in court to save the health benefits they thought they were promised. And, judging by the decisions returned in a spate of cases, fine print trumps all.

It’s a story that began in the 1989 when health costs soared and corporations moved quickly to protect their bottom lines by slashing benefits and shifting costs to retirees.  Most companies can cut retiree benefits at will.  For others, fine print in contracts makes it a little trickier, and this is where the latest plot twist is playing out in courts around the nation.

The dictionary definition of lifetime is: “The period of time during which an individual is alive.” Simple enough-if your company promised you benefits for life, you just need to be alive to receive them.  But it’s a difference of opinion over the legal definition that is stirring up trouble for some former union workers.  In recent cases, corporate lawyers are arguing that “lifetime” refers to the life of the contract, not the lifetime of the retiree.  When those contracts expire, they argue, so does the promise of the benefits.

In light of that argument, Basil Chapman, a 60-year-old former worker at ACF Industries, a railcar manufacturer, calls what ACF did to him “a set up.” Chapman, a former union local president who headed a Steelworkers bargaining committee, says his union negotiated lower starting pay for new workers in exchange for lower monthly medical payments for retirees. When the company sued for the right to change the coverage, Chapman was stunned.  To these retirees the agreement with their employer was more than just a promise, it was a contract. “This story is part of a wholesale shift in risk from companies to families,” says David Brancaccio, host of the PBS newsmagazine NOW, which is featuring Chapman in a report on April 1.  “Healthcare costs are rising, but increasingly companies are insulating themselves from these costs with individuals left to shoulder the burden.” With no place for promises on corporate balance sheets, companies are turning to the fine print with their eye on the bottom line. California-based GenCorp is relying on a sentence in an enrollment form their employees signed a decade ago to increase monthly premiums.

GenCorp, formerly the General Tire & Rubber Company, a tire manufacturer you may remember from its slogan: “Sooner or later you’ll own General,” has workers worried that sooner or later they’ll have to drop out of their coverage because it’s too expensive. And while GenCorp is riding all over its retirees, they are not alone. A Kaiser/Hewitt Survey on Retiree Health Benefits shows that a vast majority of large employers say they are “very or somewhat likely” to raise premiums and/or cost-sharing requirements in 2005, including 85% of companies surveyed predicting an increase in contributions to premiums by retirees. More ominously, 8% of employers surveyed eliminated subsidized benefits for future retirees in 2004, and 11% said they are likely to follow suit in 2005.

While most employers haven’t turned to the courts, the trend is on the rise and some are using tactics that are particularly aggressive.  Just ask Basil Chapman, who was sued by ACF after he threatened to take the company to court when he learned he’d be charged for benefits that previously were free.  Chapman’s attorneys say the preemptive move allowed company lawyers to shop for a court where they think they can win a favorable opinion. As these cases make their way through the courts, there’s little risk for the companies, which if they lose, will simply have to resume paying the benefits.  In the meantime, Chapman says, retirees who can’t wait will drop out, and for others it may just end up being a lifetime. “It’s disturbing and scary for older people,” he says.  “They just die.”

For more on this important story, tune into the PBS weekly newsmagazine NOW, airing Friday, April 1, 2005 at 9 P.M. on PBS (check local listings).

Credit: pension_watchdog

Posted by Elvis on 03/20/05 •
Section Pension Ripoff
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Rising Of The Telecom Underclass Part 2

An AT&T manager told me the company calls laying off it’s highly skilled American technicians and technicianettes - then hiring them back as low paid temps via staffing agencies - an evolution to a FLEXIBLE WORKFORCE.

Staffing agencies - more often called headhunters or recruiters - match people with jobs - not a bad deal when they find, then place qualified candidates in positions, and if a candidate performs well during a contract, is eventually hired by the company permanently with a benefit package and opportunity for advancement.  In this relationship everyone wins - the company gets a good worker, the worker gets a good job, and the staffing agency gets paid for bringing the two together.

The telecom staffing agencies’ business may be evolving - turning telecom job seekers into low paid permanent temps - revolving from one assignment to another - treated like slaves, and used as doormats - rather than placed in the traditional temp-to-perm positions. In this situation the worker doesn’t benefit.

I don’t see unions - at least the CWA - EFFECTIVELY ORGANIZING displaced telecom techies like myself. What’s more alarming is their friends at TUCKER TECHNOLOGIES offered me a (maybe long-term) temporary position doing one of my former jobs at AT&T for HALF the pay with no benefits.

Partnering of telecom companies, staffing agencies, and unions - may result in widespread exploitation of telecom workers - ESPECIALLY if unions are evolving into EXPRESSIONS of corporations - approving their flexible workforce policies, and allowing inadequate compensation for their members. This jeopardizes the spirit of organized labor movements everywhere - while highly skilled telecom workers evolve into disposable day laborers - earning low wages, devoid of benefits, opportunity, career growth, job security, profit sharing, and a decent standard of living.

Rising of the Telecom Underclass
PART 1 · PART 2 · PART 3 · PART 4 · PART 5 · PART 6

Posted by Elvis on 03/20/05 •
Section Telecom Underclass
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Saturday, March 19, 2005

Rising Of The Telecom Underclass

The increased globalization and outsourcing of service, manufacturing, and IT jobs to cheap labor, has gotten lots of press, but even with all the TELECOM MERGERS and layoffs going on, the developing underclass of folks in our industry doesn’t get much attention. 

I used to think LOU DOBBS on CNN was an alarmist, scaring us with his talk about the perils of corporate greed, trade imbalance with Communist China, illegal immigrants working for slave wages, computer programmer jobs outsourced to poverty ridden India, etc - but don’t anymore. Last year the OUTSOURCING OF AMERICA hit my middle-class home.

After searching since last August, and not finding a job through the usual means (networking, friends, job fairs, internet, word of mouth, newspaper ads, etc) a staffing agency placed me as an outsourced contractor to another telco - Sprint (after getting layed off from AT&T with 20+ years) - at half the pay, with no permanency, no benefits, and little hope of being hired. I didn’t see this job advertised on Sprint’s internet careers page, which I look at just about every day.

What’s more alarming is a surprising number of people I work with are middle-aged temporary contracted workers, with similar experiences and backgrounds as mine - layed off from one telco, to find a temp job with another - through a subcontractor - at a fraction of the pay. One guy I work with has been here for two years doing the same job as the regular full-time employee sitting next to him, hoping to someday get hired. While Sprint continues it’s internal POLICIES OF HIRING young college graduates, and career advancement for it’s regular employees - including transferring people into and out of our department - he hasn’t been offered the job (or any job) - even after two years satisfactorily doing it.  None of the contracted temps I work with have been offered any opportunities to be hired on as regular employees.  To some of us it smells like AGE BIAS. To most of us it reeks like EXPLOITATION OF LABOR.

The trend of HIRING AMERICANS THROUGH STAFFING AGENCIES and subcontractors at low wages, with little if any benefits or opportunity - combined with outsourcing to other venues of cheap labor - may continue and accelerate. If true, this may be a signal that the END OF DECENT PAYING JOBS IN TELECOM is well underway.

Feelings of hopelessness and powerlessness are not unlikely for middle-aged, middle-class displaced telecom techies already dealing with the EFFECTS OF LAYOFF.  Increased worry and stress may also be emotionally challenging.  For instance - due to the HIGH COST OF HEALTH CARE in the US - a growing fear of mine is GOING BANKRUPT from landing in the hospital or getting ill without DISABILITY INSURANCE. (Here’s one chilling REPORT.) I don’t have paid sick leave and can’t afford to continue paying for medical coverage like COBRA or INDIVIDUAL MEDICAL INSURANCE. Living with these pressures probably takes a heavy toll on one’s mental and emotional being, creating favorable conditions for debilitating depression, or stress induced illness.

Rising of the Telecom Underclass
PART 1 · PART 2 · PART 3 · PART 4 · PART 5 · PART 6

Posted by Elvis on 03/19/05 •
Section Telecom Underclass
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Tuesday, March 15, 2005

Unions Fighting Themselves

Heated talks on unions’ organizing efforts reinforce the drive to revamp the group.
LA TImes Mar 4 2005.

LAS VEGAS — A territorial spat between two of the nation’s largest unions that was discussed Thursday at the AFL-CIO’s semiannual leadership meeting underscored the potential difficulties in holding the labor federation together.

Union fights over which can organize and represent certain workers aren’t uncommon, particularly in these days of dwindling membership. But while labor leaders universally lament the waste of energy and resources, they have yet to figure out an effective way to resolve the disputes.

This quarrel, over an effort in Illinois, is significant because it involves leading protagonists in a fierce debate over the federation’s future, with one threatening to pull his union out of the AFL-CIO. Both cite the tussle as reason not to trust the other.

Related LINKS

Posted by Elvis on 03/15/05 •
Section General Reading
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Saturday, March 12, 2005

United Airlines Pension Takeover

Airline Employees’ Pensions Targeted for Federal Takeover

The Pension Benefit Guaranty Corp.—the federal agency that insures corporate pension plans—moved yesterday to take over the pensions of United Airlines’ 36,000 mechanics and baggage handlers, relieving the airline of millions of dollars in obligations to the under-funded plan.

The two unions that represent the employees oppose the takeover. One threatened to strike if it happens.

If the government takes over the plan, the employees will lose between 20 percent and 50 percent of the value of their pensions, said Robert Roach Jr., general vice president for the International Association of Machinists and Aerospace Workers, which represents 16,000 active and retired employees.

“Instead of terminating pensions, maybe we should explore terminating the employment of United’s top management, who have mired the company in bankruptcy for more than two years,” Roach said.

The group represents 736 workers at Reagan National and Dulles International airports. The Aircraft Mechanics Fraternal Association represents the remaining 20,000 active and retired United ground workers. David Quinn, spokesman for the group, said the union would fight the airline in court. Quinn stopped short of calling for a strike but said it was “something we would entertain at the time,” depending on the court outcome.

United spokeswoman Jean Medina said a strike would be illegal under bankruptcy laws and the Railway Labor Act. She said terminating the plan is necessary for the airline to cut costs and emerge from Chapter 11 bankruptcy protection this year. United, a unit of Elk Grove Village, Ill.-based UAL Corp., has operated under Chapter 11 since December 2002.

The ground employees’ plan is the second of United’s four big pension plans to be targeted by the government. The PBGC began proceedings at the end of last year to terminate the pilots’ pension plan. That matter will be reviewed in court on Friday.

Medina said United was in negotiations with its flight attendants and customer and gate agents in hopes of reaching an agreement to avoid having those pensions terminated as well.

“We believe that we need to take the difficult step to terminate and replace the plans. Ideally we would like to work that out with the unions at the bargaining table,” Medina said.

The mechanics and baggage-handlers’ plan has $1.2 billion in assets to cover $4.1 billion in benefit promises. Of the $2.9 billion shortfall, the PBGC expects to guarantee about $2.1 billion.

The agency guarantees pensions up to $45,613 a year for workers who retire at 65. Those promised higher pensions by the plan, or those who retire earlier than 65, would receive reduced payments.

PBGC Executive Director Bradley D. Belt said in a written statement that the plan is severely under-funded and that United has missed $363 million in legally required payments to it. He said the takeover is “necessary at this time to protect the [PBGC] against further losses.”

The agency recently reported a deficit of $23.3 billion

United had promised the ground workers additional benefits several years ago, but those added benefits become guaranteed by the PBGC on a phased schedule. By moving to terminate now, the agency would avoid having to cover $139 million in benefits that would become valid Monday and $88 million more in May.


Keith L. Alexander and Albert B. Crenshaw

Posted by Elvis on 03/12/05 •
Section News
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