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Ford Retirees Worried About Health Benefits Cut

Hundreds of Ford Motor Corporation's retirees seek to meet with the top executives of the automaker to tackle about the possible big cuts on health care benefits. Last week, the anxious ex-salaried workers sent a letter to Ford executives asking for a meeting to know more about the changes and to discuss the viable ways to make the cuts less onerous.

Since last fall when the automaker said that beginning in 2008, Ford will no longer provide traditional health insurance to salaried retirees older than 65 who are eligible for Medicare, only few details were given to the retirees. In addition, the company announced that it will replace the insurance with an annual stipend of $1,800. The amount can be used to defray Medicare coverage and other health costs.

Donald Whitehouse, a retiree, said he hopes that the letter, written by him on behalf of the 1,916 salaried retirees and sent to Ford CEO Alan Mulally, Executive Chairman Bill Ford Jr., Ford Americas boss Mark Fields and Ford's board of directors, will yield more answers.

Whitehouse, 65, a former quality control manager of the Ford Dearborn Assembly plant who oversees auto parts that include Borla exhaust, said he has called a toll-free number Ford provided for more information, but he still does not know how the change will affect him and his wife, Donna, 57, who is not yet eligible for Medicare. "Ford has not told us," he added.

Marcey Evans, a Ford spokeswoman, declined to comment on Whitehouse's petition or his request for a meeting. "There are still pieces of this that are being finalized," Evans said. "We will be providing additional information to retirees so that they are aware of exactly what the change means and how it will work going forward."

Ford, like other struggling automakers, is reducing health benefits and increasing employee co-pays to strive to control soaring costs and return to profitability. The automaker already has a deal with the United Auto Workers to cut health costs for union workers. The cuts will also be implemented to salaried workers' benefits.

Whitehouse wrote: "We fully recognize Ford's historically challenging times that demand effective cost-reduction steps to ensure its very survival. However, we also believe that all of us -- from salaried and hourly employees to salaried and hourly retirees -- should share equally in the sacrifice and hardship inherent in returning the company to profitability."

The letter said that the retirees felt betrayed by their previous employer. "I don't think there's a year that goes by that we don't sell at least five or six cars for Ford," said Ed May, 62, a 33-year Ford employee who retired in 1996.

Cutting health insurance for Medicare-eligible salaried employees is part of Ford strategy to save millions of dollars to be used in the restructure plan of the company. In 2006, Ford spent $3.1 billion to provide health care for 570,000 U.S. employees, retirees and dependents. However, the health care costs were diminished when it spent $3.5 billion for 590,000 employees, retirees and dependents.

Whitehouse added that he understands the struggling company's need to save money. And that he is not opposed to retirees sharing some of the pain in a world of rising health care costs. But he feared that $1,800 would not be enough, especially for retirees with serious medical conditions.

Paul Fronstin, the director of the health research program at the Employee Benefit Research Institute in Washington, D.C. said that the average cost nationally for one of the most comprehensive supplemental Medicare plans, which does not include prescriptions, is $1,800. But the price of Medicare plans fluctuates.

About The Author Jenny McLane is a 36 year old native of Iowa and has a knack for research on cars and anything and everything about it. She works full time as a Market Analyst for one of the leading car parts suppliers in the country today.
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