General Electric has announced plans to end the post-65 health coverage and life insurance for salaried employees retiring after 2014. Union officials say they believe the change is a precursor to the company reducing those benefits for union workers once their contracts expire.
In a memo sent to salaried employees late last month, Human Resources Senior Vice President John Lynch indicated the company by January 2015 would end the health benefits for any salaried worker or their spouse younger than 65 and enrolled in them. Workers already receiving the benefits before the cutoff date will not be affected and those retiring after Jan. 1, 2015, will have an opportunity to purchase replacement life insurance coverage, according to the note.
“The company is taking these actions to remain competitive now and into the future, as fewer companies offer retiree insurance or post-65 health coverage,” Lynch wrote in the letter obtained by The Daily Gazette Wednesday.
The planned change doesn’t affect GE’s unionized workforce. But union officials and retiree advocates fear the change is a sign of what the company will be demanding of its hourly workforce once their contract expires in June 2015.
“You better believe that when the contract is up, they will go after the same or similar benefit changes,” said Kevin Mahar, president of the Retiree Council of the International Union of Electronic Workers-Communications Workers of America Local 201 in Lynn, Mass. “We’ve seen that happen many times before. It’s part of what they do.”
The company confirmed the change will affect coverage for prescription drugs and a portion of the cost of hospital stays. Andrea Doane, a spokeswoman for the company, said the coverage is supplemental to Medicare, the primary source of health insurance for those over 65.
“GE does not take decisions such as this one lightly,” she said. “As is the case with other employers, we are taking these actions to remain competitive now and in the future.”
Doane also said any changes for hourly workers would be decided through contract negotiations. And she said the changes for salaried employees were done in a manner that allows them to plan ahead.
“These changes will not take effect for more than two years,” she said. “The timing of this announcement is intended to allow affected individuals an opportunity to evaluate the changes and select alternative coverage if they choose. ”
This didn’t dampen the ire of Gene Elk, the secretary of the United Electrical, Radio and Machine Workers of America conference board with GE, who questioned how the company could stomach making such a change after recently providing a top-ranking executive with a lucrative retirement package. GE agreed to pay John Krenicki, the former vice chairman of GE Energy, about $89,000 per month after the division was broken into three separate entities last summer.
In July, Krenicki announced GE Power and Water would remain based in Schenectady, while GE Oil and Gas would locate in Florence, Italy, and GE Energy Management would go to Atlanta, Ga. Krenicki, who is due to leave GE at the end of this year, will earn the monthly payout until 2022.
“This is a company that makes incredible amounts of profits,” Elk said. “This is just absolutely outrageous. They’re trying to take away the medical benefits of the people who worked for the company for so many years and made it successful.”
Officials with the IUE-CWA Local 301 or the union’s retiree council in Schenectady did not return calls for comment Wednesday.
IUE-CWA and UE represent the company’s two largest unions. The IUE represents 1,205 workers at GE Energy in Schenectady, while the UE represents 170 at GE Energy in Fort Edward.
The move to limit benefits for non-union salaried employees comes after the eligibility window for the company’s pension plan for union workers closed earlier this year. The 100-year-old pension, one of the first in the United States, stopped accepting new employees in January.
Mahar said the company’s drive for greater profits has affected how it treats the workforce that helped build it into a worldwide billion-dollar enterprise. He said the company’s latest move is more evidence of its dwindling concern for its employees, adding, “It’s sort of a sad day.”