Whirlpool can change Maytag retirees' benefits

By Michael J. Crumb Associated Press DES MOINES, Iowa (AP) -- Benefits for about 3,000 Maytag Corp. retirees can be changed by Whirlpool in an effort to bring them in line with current employees, according to a federal judge's ruling. Whirlpool Corp. purchased the Newton, Iowa-based company in 2006 and sought to end medical benefits Maytag retirees claimed they were owed under a previous collective bargaining agreement. The Benton Harbor, Mich.-based Whirlpool filed a lawsuit as a class action complaint in 2008 against the international and local chapters of the United Auto Workers union and three retired Maytag workers as representatives of the class seeking to modify medical benefits for Maytag retirees. The case went to trial in December, 2010, and last week a federal judge in the U.S. District Court in the Southern District of Iowa, ruled in favor of Whirlpool. Court records show the company proposed changing retirees' medical benefits during contract talks but the union refused to discuss the issue. The company proposed modifying health benefits for the retirees to bring the benefits in line with the plan for current Whirlpool employees, retirees and their dependents. The union argued the company could not change the benefits because they were covered by the contract Maytag workers had with Maytag. At issue in the case was the union's argument that Maytag agreed to vest retiree medical benefits and promised benefits for the lifetime of each retiree and their dependents. The court disagreed and said the union failed to present evidence the company agreed to vest medical benefits of retirees. "The court is not unaware of the expectation of the Newton retirees nor unsympathetic in the result reached herein," U.S. District Court Judge James Gritzner wrote in his decision, filed on July 22. "However, the union has no carried its burden ... of showing that the company agreed to vest retiree medical benefits. "Regardless of what either side was thinking about vesting ... the union had the obligation to ... present evidence that the company agreed to provide vested retiree medical benefits," Gritzner wrote. Larry Shaver, 64, who retired from Maytag in 2002, told The Associated Press, that Maytag employees contributed money out of their paychecks every month to be put into accounts to pay for their health benefits after they retired, only to have the benefits eliminated by Whirlpool. "I feel like somebody stabbed me in the heart," said Shaver, who acts as a spokesman for the Maytag retirees. He said Maytag retirees received 100 percent coverage with no out-of-pocket expenses or deductibles. Under the Whirlpool plan, retirees under age 64 pay $237 a month per person with a $500 deductible. They then pay 20 percent of their medical expenses up to $3,500, he said. Retirees over age 65 pay nearly $50 a month with a $500 deductible and then pay 20 percent of their expenses, Shaver said. "Nothing is ever covered at 100 percent," he said. Shaver said the union was working with attorneys to determine if it will appeal. L.D. Funk, another Maytag retiree, said he also feels betrayed by Whirlpool. "When they bought out Maytag, they bought it as a whole, they bought all of it, they bought its debt, they bought its properties and they bought its obligations," said Funk, now 73. "I feel like I was one of those obligations because I worked there 28-29 years knowing I was putting money away for my older years and I felt safe and secure. "Now it's left me and a whole lot of other people in a whole different situation," Funk said. Whirlpool officials released a statement Tuesday that said its health care plan is "superior to plans offered by 75 percent of Fortune 500 companies. "We are pleased that the U.S. District Court for the Southern District of Iowa found that these changes are appropriate," the company's statement said. Whirlpool bought rival Maytag in 2006 for $1.7 billion and assumed the negotiated union contracts and related benefit plans. Whirlpool closed the Maytag corporate headquarters in Newton and a laundry equipment factory in the town of about 15,000 located 30 miles east of Des Moines. About 1,800 workers lost their jobs. Published: Thu, Jul 28, 2011

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