In March of 2006, Continental Tire of North America carried through its plans to slash its payments for health care benefits for its retirees. For months, the company had been threatening to impose a $3,000 cap on payments for retiree health care. With the annual cost of family health care coverage costing retirees as much as $15,000, the implementation of this cap could be financially devastating.
Many retirees are reporting having to shell out as much as 90% of their pensions to pay for healthcare. One retiree, Ellis Nelson for instance pays $1,011 of his $1,126 monthly pension for health insurance for himself and his wife. His storied is chronicled on the United Steelworkers website "SolidarityAtConti."
“Ellis Nelson started working for General Tire in 1969. He spent most of his 31-year career with the company as a “Compounder” before retiring in 2000. Ellis and his wife Rose still live in Charlotte, but both of them have fallen into bad health. Several years ago Ellis had to undergo an invasive back surgery and he still experiences back pain to this day. In a couple months, he is scheduled to undergo a hip replacement procedure—both of these ailments are likely products of years of hard labor in a tire factory. Still, Ellis spends most of his time taking care of his wife, Rose who is in advanced stages of Alzheimer’s.
The Nelsons simply cannot afford to go without health insurance, so Ellis must now spend $1,011 of his $1,126 monthly pension on health insurance premiums for himself and his wife.“
While Ellis primary concern is economic, other retirees simply feel betrayed. Bruce Nash, who worked in the Charlotte tire plan for 34 years says he feels that the company has taken advantage of him.
“Bruce Nash was just 18 years old when he went to work at the General Tire plant in Charlotte, North Carolina in 1972. While Bruce was working, he and his family had a good life on his union wages and both of his children went on to college without scholarships. Bruce spent 34 years with the company before retiring at the age of 52. Now, after spending his entire working life with Continental, Bruce is looking for other work because his $1,400 pension isn’t enough to cover the high healthcare premiums.
Bruce feels that the company is going back on its word by cutting health care now that he’s too old to start another career. ‘Folks in these parts don’t mind working for a living but they take offense to being taken advantage of…Life expectancy has increased but mine has not because I can’t afford health insurance.’”
In all, 2,500 retirees and their families are impacted by these healthcare cuts. The retirees and their union, the United Steelworkers have filed a class action lawsuit against the company demanding a preliminary and permanent injunction against the healthcare cuts. Unfortunately that type of litigation can take years before justice is served.