Delphi looks to end benefits for retired salaried employees

ken.delabastide@kokomotribune.com

Delphi Corp. has filed a motion in bankruptcy court seeking to end all health and life insurance benefits for retired salaried employees.

Lindsey Williams, with Delphi Corp. in New York, said the motion was filed Wednesday and will be heard by the bankruptcy judge later this month.

The benefits - including dental and eye care coverage - would end April 1.

If the motion is approved, it would impact approximately 15,000 retired salary employees nationwide.

Those affected may contest the motion by filing an objection with the U.S. Bankruptcy Court by Feb. 17.

In a letter to salaried employees, the company states that the decision to eliminate the benefits for retired salaried employees is a direct result of the dramatic decline in worldwide sales in the automotive industry.

Future and current retirees will have access to the health and life insurance coverages after April 1, but will be required to pay the full cost of continued coverages.

"Delphi acknowledges these actions will impose a real hardship on former beneficiaries of these programs," read the letter signed by John Sheehan and Kevin Butler, the vice president and CFO vice president human resources. "However, the company's recognition of this hardship, which allowed Delphi to continue these benefits in a more robust economic environment, regretfully does not support these programs in the current economic environment."

Williams said the annual cost of providing the medical and life insurance is more than $70 million.

"If the amendment become effective, it will result in a cost savings of $200 million through our business plan through 2011," he said.

Williams said the amendment, if approved by the bankruptcy court judge, would eliminate $1.1 billion from the balance sheet for Delphi.

Mike Kennedy, who retired from Delphi at the end of 2008, said he received a packet of information on Thursday.

"It came as a total surprise," Kennedy said. "No one I've talked with heard anything about this."

The packet indicated that salaried employees that remain working with Delphi will continue to receive health and life insurance benefits as long as they are employed. If a salaried person retires, quits or is separated from the company, the benefits would end.

"This will affect a lot of people in Kokomo and Indiana," Kennedy said. "A pension is all I have left."

Kennedy said he is concerned for people who don't have other health insurance options available and may not qualify for Medicare coverage.

He said at age 65, a retiree's insurance benefits would terminate and the company was supposed to provide $10,000 to be used to purchase supplemental insurance.

"That's gone, too," Kennedy said.