According to The Detroit News, GM plans to finish the latest round of white collar layoffs by the end of the year, with most coming by October 1. The layoffs are expected to primarily take place in Detroit, Warren, Pontiac and Milford. By year’s end, GM will have shed 6,000 white collar employees.

Workers unlucky enough to receive a pink slip will be eligible for up to six months pay and benefits. Executives can receive up to 12 months of coverage. Employees can also opt for an early retirement package.

GM also indicated that more hourly worker layoffs could be on the way, but no announcement has been made as of yet.

The cuts affect nearly 350,000 unionized GM and Chrysler retirees and will mean painful changes for those used to rich benefits and fewer out-of-pocket medical costs.

Along with losing dental and vision benefits, retirees will shoulder higher copayments for emergency room visits and prescription drugs. Catastrophic plans will no longer be offered to retirees or their surviving spouses. And retirees will lose some drug coverage, including benefits for erectile dysfunction medication.

The benefits are set to end June 30. Retirees are scrambling to get costly dentures and new pairs of glasses, providing a windfall for dental and vision offices at a time when many patients are delaying care because of higher copayments and tightening budgets.

“It’s been nuts,” said David Borlas, a dentist in Chesterfield who has been so busy lately he frequently works straight through his lunch hour. “Once the announcement came out, people started coming out of the woodwork. We’ve got people jammed on top of people.”

But these same businesses recognize the rush is temporary and fear work will dry up once the cutbacks go into effect, further eroding a once reliable source of business for many medical providers.

Medical experts also worry retirees will hold off on routine care, which can help prevent minor problems from turning into costlier ones in the future.

Rupert O’Brien, chairman for the retiree chapter of UAW Local 5960 in Orion Township, said members have been rushing to get dental and vision appointments but have run into long waiting lists and encountered offices booked through the month.

“A lot of them don’t know what they’re going to do,” said O’Brien, a GM hourly retiree whose chapter has about 6,000 members.

Medicare, the federal health care program for seniors and people with disabilities, doesn’t cover vision or dental. The only way to get the coverage is to buy it, he added.

“It’s going to be quite a bit out of a retiree’s pocket,” O’Brien said, noting that purchasing dental coverage will cost some couples about $80 per month.
Temporary, for now

For now, the cuts are temporary and intended to conserve cash in the VEBA, said Kristin Dziczek, director of labor and industry for the Ann Arbor-based Center for Automotive Research. The changes could be reversed or upheld once the UAW takes over the health trust next year.

“It’s a whole new ballgame on January 1,” she added.

Still, dentists and vision care specialists already are bracing for the cutbacks. And others in the industry worry the cuts could go deeper, resulting in higher out-of-pocket costs for routine medical visits, a trend quickly becoming the standard for other employer-backed health plans.

“This is our window of opportunity,” said Scott VanderVeen, a dentist in Clarkston whose office has extended hours, postponed vacations and added full days to accommodate the influx of patients. “We realize our business will slow down in July.”

Borlas, the Chesterfield dentist, who started practicing dentistry before the UAW began offering dental insurance in the mid-1970s, fears retirees will revert to the old mindset of basing medical decisions not on quality but on what they can afford.

“The common theme back then was they’re not going to opt for a root canal or a crown for an infected tooth, but ask to pull it, which is a much lower level of dental care. That’s what people could afford,” said Borlas, an executive director for the Macomb Dental Society. “And then, came along dental insurance. Now, the pendulum is swinging back the other way.”
Dentists also affected

Dentists aren’t the only health professionals seeing a boom and fearing a bust.

Dr. Kevin Everett, an ophthalmologist with the Henry Ford Medical Group, said his office in Sterling Heights has seen about a 15 percent bump in calls from retirees seeking to make appointments before July 1. Revenue is up by at least 10 percent for optometrist visits, he said.

“Considering the economy, that’s pretty dramatic,” Everett added.

However, he worries the uptick will soon give way to a lull after July 1. Retirees may stop offices visits, even for illnesses like glaucoma and cataracts, which are covered under their medical benefits. Vision insurance typically only covers routine eye exams and the purchase of glasses or contacts.

“We’ve always had patients confused about that, but now it’s really bad,” Everett said. “Many are going to damage themselves sitting home with problems thinking they can’t be seen and letting them get worse.”

Editor’s Note: The following statement is attributable to Joe Hinrichs, group vice president, Global Manufacturing and Labor Affairs, Ford Motor Company.

Dearborn, Mich., Feb. 23 – The United Auto Workers union and Ford Motor Company have reached a tentative agreement on modifications to the Voluntary Employee Beneficiary Association (VEBA) retiree health care trust.

We are pleased with this agreement, which provides us the option to settle with Ford common stock up to 50 percent of the payments into the VEBA in lieu of cash. We will consider each payment when it is due and use our discretion in determining whether cash or stock makes sense at the time, balancing our liquidity needs and preserving shareholder value.

The VEBA agreement – together with the agreement reached Feb. 15 by Ford and the UAW to modify certain operating provisions of the 2007 National Labor Agreement – is subject to ratification by the active UAW-Ford membership and other conditions, including pursuing restructuring actions with other stakeholders. Additionally, the VEBA agreement requires court approval.

The agreements, if finalized, will allow Ford to become competitive with foreign automakers’ U.S. manufacturing operations, and are critical to our efforts to operate through the current deep economic downturn without accessing government loans and continue to fully invest in our ONE Ford product plan.

I would like to thank the entire UAW leadership and national bargaining committee – particularly UAW President Ron Gettelfinger and UAW Vice President Bob King – for their leadership during these important discussions. I also would like to thank Ford’s national bargaining team for their tireless efforts over the past few weeks.

All of us at Ford will continue to work with all of our stakeholders to participate in the current industry restructuring and improve our company’s overall competitiveness.