- The Washington Times - Thursday, November 2, 2006

DEARBORN, Mich. (AP) — Ford Motor Co., which last week announced a $5.8 billion third-quarter loss, is reportedly cutting back health care benefits for some white-collar retirees, boosting health care premiums for salaried workers and not giving them merit pay raises next year.

The benefit cuts were announced Wednesday in an information packet to the salaried workers, the Detroit News reported. It said it had obtained a copy of the memo.

Ford said that starting in 2008, it no longer will provide health insurance for Medicare-eligible salaried retirees. In its place, Ford said it will give them $1,800 a year for supplemental insurance or out-of-pocket health costs.

Ford said it also will stop providing health coverage for dependent children of retirees who are 65 or older. The company now covers some employees’ and retirees’ children up to age 25.

Ford also said it was raising health care premiums effective June 1 for most salaried workers by about 30 percent for the second straight year.

The Dearborn-based automaker spent $3.5 billion last year for health benefits for 590,000 employees, retirees and dependents.

Two-thirds of the cost was for retiree health care.

In addition to the health care cuts, Ford’s white-collar workers will not get merit pay raises next year for the first time in 13 years, the company said.

Ford did say that it would begin a partial match to salaried employees’ 401(k) retirement contributions next year. It had suspended such matching contributions in July 2005.

In March, DaimlerChrysler AG’s Chrysler Group said it would link its health care plan for active and retired salaried employees to their salaries, with top executives responsible for up to 100 percent of their premiums.

General Motors Corp. has said that it will cap its salaried retiree health care costs at 2007 levels.

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