IUE-CWA Vows to Fight to Protect Retiree Health Care in GM Bankruptcy Case

DAYTON, Ohio, June 1, 2009: IUE-CWA, the Industrial Division of the Communications Workers of America, is moving aggressively to protect the interests of more than 41,000 represented retirees and their dependents with a filing to stop General Motors' plan to sell its viable assets.

The objection, to be filed today in the Southern District of New York Bankruptcy Court, seeks to prevent GM's proposed Section 363 sale that would strip GM of the resources needed to pay the health care and other benefits promised IUE-CWA retirees. The union estimates its claims against GM will top $5 billion, the vast majority of which are the benefits owed to retirees.

The union states that GM is violating bankruptcy code with disparate treatment of groups of retirees who have the same promised benefits, noting that under Section 1114 the company must show that any proposed reduction is fair and equitable when compared to how similar groups are dealt with.

The filing calls GM "not only unfair, but cruel," for protecting lifetime health and life insurance benefits for retirees similarly situated under the United Auto Workers while leaving IUE-CWA retirees and another 6,500 retirees represented by other unions with unsecured creditor claims against a company that will have no assets if the planned sale goes through.

IUE-CWA reached agreement with GM on a voluntary employee beneficiary association to cover its members in December 2008 but the company refused to implement the VEBA citing requirements imposed by the U.S. Treasury Department in its initial bailout assistance. Since then, GM has made no offers on how to resolve the benefits issue.

"With the Treasury Department's apparent blessing, GM is trying to subvert the bankruptcy process by using the sale to reorganize the company without meeting any of the standards set by the bankruptcy code," said IUE-CWA President Jim Clark. "If GM is successful, our retirees will be left holding an empty bag. The law does not allow favoritism for powerful creditors and we will not allow this grossly unfair attempt to cheat our retirees to proceed unchecked."