Whatever happened to that golden parachute?
The rules were simple, if you were a white-collar worker, in Detroit: make it to retirement and you were set for life. Pension, benefits, cheap cars, it was the good life in return for devoting your life to the company.
But something’s happened, and for salaried retirees, the news hasn’t been good. In recent years, the Big Three have been steadily cutting back on benefits, notably passing on significant health care costs.
The latest cutbacks come at Chrysler, which has been slashing costs, whenever and wherever possible since the ailing automaker was acquired, last year, by the private equity giant, Cerberus Capital Management.
Chrysler retirees opened the mail, this week, to find that they’re losing their previously free life insurance benefits which, for some salaried employees, were worth the equivalent of their final, full year’s pay.
“We made this choice…after looking at the competitive landscape,” Thomas Hadrych, Chrysler’s pay and benefits director, told the Detroit News. He also noted that the majority of Fortune 1000 companies don’t offer insurance to salaried employees. At least not anymore, as corporate America continues cutting back on benefits.
Not everyone is losing their insurance, however. Top managers and union workers will keep their free policies, it turns out. Those senior executives need to protect their families, obviously, and union contracts keep members of the United Auto Workers Union protected against unilateral cutbacks.