The GM Bankruptcy and the Failed Promise: Next Time Kiss Me First

In Detroit in the fall of 2009, to be pissed off or scared is nearly the norm--and I'm not alone. Like many of the 122,000 salaried GM retirees (and their wives, husbands and children) who are in the process of getting comprehensively screwed by what is or was General Motors, the US government, and the US bankruptcy court in the Southern District of New York that's handling the GM bankruptcy, I'm bitter.

Nearly thirty years ago, my father, a GM employee until he retired in 1989, received a life insurance policy from GM as a form of compensation. It's something he was proud of, something that gave him real peace of mind over the years.

Last week, at 85 and in poor health, he received a letter from GM and the newly-involved Met Life insurance company stating that the entire policy was cancelled immediately, although he could re-apply within 31 days to pay his own premiums for an individual policy of up to $100,000. The monthly premium for that amount--a fraction of his long-held existing policy--would be $847 a month. Not possible for most folks, let alone a widower on a pension. And it comes with another lovely little clause: if he were to die within two years of initiating this policy, the only benefits paid out would be the collected premiums, not the $100,000.

Going off an actuarial table that I found at the Social Security Administration website, if an 85 year old man were to actually buy the full amount of the policy he held for all those years, premiums would be more than $45,000 for a single year. Then, consider that term life insurance policies hold no cash value, and that the actuarial tables show a one-year mortality rate for 85-year olds of about 11%. The bottom line, as corporate lemmings like to say, is this: There is not enough -- and there was never going to be enough -- money in the so-called bail-out to pay for any sustained period of time for the impacted retirees and their beneficiaries. When it comes to the bail-out, the bankers got theirs, the insurance giants got theirs, but the auto companies and their employees got theirs from behind.

This is of course morally reprehensible. Disgusting. Had he known 35 years ago that this would happen to his policy in his late years, he surely would've bought adequate life insurance along the way. That opportunity is now ripped away from him, gone. My mother passed away in 2008, so this next disturbing aspect is not an issue with our family. But the question looms: What of the thousands of other men and women of his age who are GM retirees who will now leave elderly spouses and impaired dependents penniless upon their own death?

My dad epitomizes the Greatest Generation. He was a lieutenant in the Air Force during WWII, came home, went to MSU, married and began a family. He then worked at the GM Assembly plant in Flint after the war, on the floor, before returning to his hometown of Saginaw to run the credit arm for Draper Chevrolet for many years. He's always been a car man, and he gave the auto trade his life. He began working as a salaried GM employee in Trenton, NJ in 1971, and stayed there for several years before being promoted to Detroit in the early 80s, where he oversaw a field team of 15 lobbyists working in the country's state capitals. He retired in 1989.

He was raised with a sense of obligation toward his community. You got involved and aligned your own ambition with the common welfare of your place and your people. He was the mayor of Saginaw from 1962-'66, nominated the city's first black mayor, and twice ran for State Senate. He was President of the Michigan Municipal League. While at GM, he aggressively and successfully fought for our current seat belt laws.
So when I think of my dad, I think of someone who always treated life as a progressive, optimistic adventure. He loves America and believed in and loved every minute of his GM work life. To him, life was a grand experience, to give in to the cliché, a journey of possibilities. I know few people more beloved by others than my dad, and it's probably because I've never known a better listener. His manner is to always inquire about your welfare, rarely talk of himself—and listen. His life has been made up of people of all walks, all means, all creeds, and colors. He lived his life not as he found it, but as he made it happen.

He grew up on the east side of Saginaw in the 20s & 30s, a place that formed his values and convictions But as he aged, he accepted the world’s change, and found in himself the ability to change, to think less conventionally, to think broadly about things he once thought were absolute. I think of him as someone who held in his heart the fire’s center. Someone who was alive–alive with talk, alive with faith, alive with friendship, alive with responsibility, wanting many things at the same time, always saying the reassuring thing, ambitious while still being someone you could count on, always.

And even if he thought his life to be at times too hard or frustrating, he never shared that desperation; he kept on greeting the good and the bad with the same face. And when things were really good, and he was at GM in its best days, he never lost his common touch. And when things were really bad, he did that hardest thing, and put his head down and took care of his family while maintaining his dignity.

Now it's really tough however. His health care has been decreased as well, but not eliminated in full. Amid all the recent bailout billions, banking loans, insurance industry debt forgiven, and exorbitant bonuses paid to men and women who performed poorly, something like this is being done to a man like my dad, and thousands like him. After believing things were one way for more than 30 years, to find that you're uninsured and not feeling well is very much akin to the Bernard Madoff situation, which was considered the crime of the century. And the government is finding money for those plaintiffs! Is the GM Bankruptcy also a crime?

It was, of course, the members of President Obama's task force who forced this--a result that said such costs would not be supported any longer. And it was Obama's resolution that said that public resistance, from the likes of Rick Waggoner, would be met by getting kicked to the curb (which he was, and quickly). Now that the political will has been shown to cut off these costs (and with precious little blow-back from anyone anywhere), it's not as if there will be political will to restore them. So I hold President Obama and Treasury Secretary Geithner accountable in this, for their lack of vision, and lack of concern.

It won't be GM, and it won't be the government, and it won't be Met Life, but possibly there's enough in something called the Motors Liquidation Corporation till to do something for these retirees. Or, there may one day be a class action settlement on all this, but it will be well after my dad's gone, and will likely be next to worthless, pennies on the dollar. There's no legal recourse, no answer from congressmen I've contacted, no answer from Met Life or GM. New GM (GM Reinvention) doesn't want to know about "old" GM--that's also very clear.

This last generation of GM corporate leaders, from Waggoner, Bob Lutz and John Smith on down, should be held directly accountable, their hundreds of millions in bonuses made conspicuous in comparison to the retirees' losses. In fact I hold the last generation of GM leaders responsible for the litany of failure that crushed GM, once the safest bet in the world: the Fiat fiasco, the bungling of the Oldsmobile shutdown, the Aztec, the Hummer, the disastrous end to the original Electric Vehicle program, and of course the poor financial planning that ultimately left the company far too vulnerable to the events of the past year.

A Michigan-based group called the GM Retirees Association hired a San Francisco law firm to bring their cause before the Bankruptcy Court, with no success. As their lead counsel said to me yesterday, "The first thing we learn in law school is that very few wrongs in this world are actually redressed."

The beautiful go blameless, part XXIV.