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Safety nets and the lack thereof

One of the many things I like about self-employment is that I've known from the start that I was operating without a safety net. (If I'd been better at the self-employment game, I probably would have been able to craft one by hand. Instead, 20 years later, I'm still up there on the high wire even at those times when I'm hanging on to it by my fingernails.)

All along, I've appreciated the clarity of my situation. Knowing there wasn't a net below me was far more comforting than the illusion of a corporate safety net -- yes, there was certainly some sort of net there. Over ten years in Corporate America, I saw that safety net catch several coworkers who fell into the net due to corporate restructurings, layoffs, and various medical/disability issues. But I saw at least as many other coworkers make the same sorts of falls only to drop through weak spots and even huge holes in the safety net that was supposedly there for everyone. There was a net, all right, but I never knew whether or not it would catch me. For me, the illusion of safety is more distressing than working without a net at all.

I can deal with the freak accidents that can happen with a solid safety net, the random roll of the dice that drops someone through or bounces them off. But not a net that's clearly full of holes and transient weak spots so even "fall to the left and you'll be all right" can't be counted on.

Today's review of recent Court filings in the Visteon Bankruptcy brought personal insights into the thousands of people falling through the safety net as past promises made are cast aside and a generation of retired Ford Motor employees are abandoned not by the company they retired from, but by another that was never of their choosing.

First, the highlights of what seems to be going on with the Committee of Unsecured Creditors. (That's the group representing me and the rest of the $1.3 billion in unsecured debt the company held at the time it filed for bankruptcy.) The Committee has approached Visteon to discuss alternative plan structures -- presumably the Committee wants an outcome that give unsecured creditors some recompense rather than none at all.

The Committee is asking the Court to compell PriceWaterhousecoopers to provide various documents as part of the Committee's review of financial documents filed. PriceWaterhousecoopers objects to the Committee's motion, arguing all sorts of things that sound reasonable up on the surface. I don't know enough to judge further, only enough to say that outside of Court when you froth on about the 18 reasons something is rubbish, it's rarely a good sign. Especially when the 18 things contradict themselves. Quasi-quoted: -"The motion should be rejected because we're already giving them everything they want without needing a court order"- and -"The motion should be rejected because they're now asking for stuff we say is extraneous and don't plan to give them."-

So there's that. Court hearings on the matter are delayed until mid-February, and there's already mention in the motions of extending at least some parts until April.

But then there are the dozens of letters from retirees, objecting to their pensions being turned over to the Federal Government's Pension Benefit Guaranty Corporation. I find myself in total sympathy with them.

Yes, there are all sorts of arguments about why pension deals made in the past weren't good long-term business practices for the companies that made them, that they weren't affordable, that they're too burdensome, etc. etc.

As always, there's plenty enough blame to go around, but dammit, the companies made the offers. They made the promises. Ford did; Visteon did; and all the related subsidiaries, too. Their employees accepted the deals, some of them cutting their work lives short in exchange for the guarantees being offered. And now the guarantees have proven not to be guarantees at all. Retiree health and life insurance is going away on April 1st, even for retirees who didn't work for Visteon a single day of their working years, who retired years before Visteon existed. Other life-long Ford employees spent the last few years of their worklife with Visteon when Ford spun the group off, then took early retirement deals meeting deadlines Visteon imposed as the company struggled to downsize and offload the expense of employees with the most seniority.

Adrian Legg perhaps said it best when he spoke about contracts in the music industry, about how the performer pays a lawyer to look out for his or her interests. To the performer's eye, the contract says "you get screwed, you get screwed, you get screwed, you get screwed." The lawyer reviews it and concurs, adding -"here on page doubley-X, sub-clause 28f, it say's 'you get screwed; you might not have noticed that. That'll be $500." Right.

The letters are from people like my father, people of the generation where it was normal to work for one company your entire career.

First off, let me note that these excerpts were taken from PDFs of the letters. There were varying levels of typos from the scans-to-PDF process, and a few in the original letters. I've cleaned up many of those introduced by the scanning/PDF process; any remaining are probably ones I missed.

***********
Excerpts from a few of the letters
***********

I was told numerous times that this pension plan money, including my contribution along with the company contribution, was set aside so that whatever happens to the company this money will still be there for me at retirement.

I have already received notice that my retirement health insurance will cease on April 1, 2010. I have approximately $50,000 in a cash medical account that was set aside for me by Visteon to pay my monthly health insurance premiums until it is depleted. This cash medical account was part of my severance agreement when the plant was closed in 2007. I took this agreement instead of a life time health insurance benefit and a reduced pension amount. This approximately $50,000 will be denied to me come April 1, 2010. I am a pre-Medicare eligible retiree which means that l will have to pay a high monthly health insurance premium to obtain insurance for my wife and me until we are Medicare eligible. This will be at least two years.

It is absolutely immoral to allow Visteon to continue to eliminate and/ or reduce my retirement benefits that were promised to me over my thirty-five years of service. I realize that my pension would not be completely eliminated, unless the U.S. Government Treasury fails, but it will be reduced according to the PBGC guidelines.

*******

l am objecting in allowing Visteon to move its pension liabilities to the Government run PBGC. l worked for Ford Motor Compony for 28 yeors before it spun off to Visteon. My total seniority was 35 years wiih FERCO ond VISTEON. I paid into the retirement fund the maximum allowed over that time frame. Something has got to be wrong with the transfer of retirement funds at the time of spin-off.

I lost opprox. 2 years of income due to the edict by Visteon that anyone eligible for retirement had to do so prior io June 1, 2006 in order to keep their medical and life insurance. Per the recent Judge ruling, our medical and life insurances ends April 1, 2010. By having to pick up the total cost of medical insurance for my wife nd I will be extremely expensive. Taking an additional reduction in my pension will be devastating. On the day I retired, I was told that the Visteon retirement account was FULLY FUNDED.

I object to allowing Visteon to move its current pension liobilities io PBGC and ask the court to deny the Visteon request.

*******

Visteon pension and social security is the major part of my income. I am working a part time job trying the make ends meet. I was 61 years old when the plant closed and I was laid off. I had to take the early retirement to have money coming in while I was trying to find another full time job. I sent out many resumes and did not receive even a no thank you letter. Also exhausting my 401K before finally filing for social security at age 62 so I could pay rent and cover utilities. Like many others I had to file for bankruptcy and surrender my home and property which had been in the family since the late 1800s because I could no make the mortgage payments.

After already losing my medical and life insurance as of April 1st 2010 losing all or part of my pension would be an extreme hard ship on my family and me.

***********

THERE ARE CURRENTLY THOUSANDS OF PEOPLE RECEIVING BENEFITS FROM THESE PENSION PLANS, WHO NEVER WORKED FOR THE VISTEON CORPORATION I FOR ONE, STARTED MY EMPLOYMENT WITH THE PHILCO . FORD CORPORATION, IN PHILADELPHIA, PA IN SEPTEMBER 196I AND WORKED CONTINUOUSLY FOR ALL OF THE COMPANIE'S PREDECESSORS FOR OVER THIRTY SIX [36] YEARS. AT NO TIME DID I EVER WORK FOR THE VISTEON CORPORATION. MY RETIREMENT IN 1997 WAS FROM THE FORD ELECTRONICS AND REFRIGERATION CORPORATION. FOLLOWING THE JUNE 2OOO ESTABLISHMENT OF THE VISTEON CORPORATION, I CONTINUED TO RECEIVE CORRESPONDENCE FROM THE FORD ELECTRONICS AND REFRIGERATION CORPORATION'S RETIREE SERVICING UNIT ADVISING ME OF VARIOUS CHANGES TO MY PENSION. DURING MY EMPLOYMENT, LIKE MANY OTHER WORKERS, THE CONTRIBUTIONS I MADE TO THE PENSION PLAN WHERE MADE IN ACCORDANCE WITH THE PROVISIONS OF THE FERCO PLAN. IT IS RESPECTFULLY REQUESTED THAT IN REVIEWING THIS MATTER YOU CONSIDER THE DISTINCTION BETWEEN THE TWO COMPANIES, ALONG WITH ANY FIDUCIARY RESPONSIBILITY
THAT FORD MOTOR COMPANY MAY HAVE IN OVERSEEING THESE PENSION PLANS.

************

It is my understanding that Visteon is considering turning our pension fund over to the Federal Government. We will lose a percentage of our pension if this happens, which I feel is not fair to us. I gave 48 years of dedication and loyalty to Ferrco. I was never employed by Visteon because I retired in 1995, which was still Ford Motor Company Thirty one years was under Ford, and the other years were for Rex and Philco. I am 82 years old and they are taking all of my health and drug insurance away which is adding an extra cost to me each month because i will need some type of supplemental insurance. With all the prescription cost I have, this will double my monthly expenses. lf they turn my pension fund over to the government, I will have less to live on and much more going out.

Arrrgh.

Comments

( 8 comments — Leave a comment )
also_huey
Jan. 18th, 2010 08:34 pm (UTC)
...only enough to say that outside of Court when you froth on about the 18 reasons something is rubbish, it's rarely a good sign. Especially when the 18 things contradict themselves...

This is a somewhat strange but nonetheless perfectly normal bit of lawyering in the US legal system. In a filing where you're going to name every defense you could possibly use, it doesn't matter if (and in fact, it's common that) any of those defenses contradict each other. "It wasn't me, it was my brother -- and if it was me, he had it comin'" is a good model.
gerisullivan
Jan. 19th, 2010 04:47 am (UTC)
Thank you. Yes, that makes a certain kind of sense -- throw every argument you've got into it to increase the possibility that the court will find merit in at least one of them and grant your motion accordingly. And consolidating all of the arguments into one filing rather than motion after motion after motion on the same subject would seem to have the same efficiency and related cost savings that consolidating changes to a written or designed document does.

At this point, my analogy breaks down -- conflicting document changes can't stand; they have to be resolved. There has to be a coherent whole. This is also true of many legal documents -- wills and contracts, for example. Just not motions, eh?
patty1943
Jan. 18th, 2010 08:35 pm (UTC)
What a crock of shit! The CEO's get bonuses because it is part of their "contract" and then they break any other contract they want to. American business is no longer about good business practices, honesty or anything else but cheat everyone except me, the management.
May they rot in hell.
madfilkentist
Jan. 18th, 2010 09:01 pm (UTC)
I was self-employed for 15 years and enjoyed it a lot because I knew where I stood. Some potential clients tried to shaft me, sure. One wanted free support afterward -- on a term contract, not a project-based contract, and also wanted to own my mind for free for six months afterwards. I itemized the objectionable parts in the contract: "not acceptable -- not acceptable -- not acceptable -- bullshit -- " etc. I figured there was just a chance they were testing whether I was reading the contract, in which case dissecting it thoroughly was to my advantage. But they really did think they'd find someone who would sign it. I laughed at them.
galacticvoyeur
Jan. 19th, 2010 02:02 am (UTC)
Visteon seemed like a nasty tangle of worms several years ago, I'm really sorry to hear the extent of all this. Very, very sorry.

And people wondered why the Yippies were saying "Eat The Rich!" 30 years ago...
malkingrey
Jan. 19th, 2010 03:23 pm (UTC)
Knowing there wasn't a net below me was far more comforting than the illusion of a corporate safety net

I know what you mean. At least when Bad Stuff™ happens, as a freelancer you don't get that sense of simultaneous betrayal and it-must-have-been-my-fault-somehow that getting shafted by an employer can give you.

The only safety net that I've ever had dealings with that came close to not having more holes than net was the US military's. (Among other things, the difference between what our two elder kids cost us in prenatal and labor&delivery charges and what the twins -- born about six months after Himself was no longer with Uncle Sam's Canoe Club -- cost us, was . . . instructive. That's the word. Instructive. Thank god for mustering-out pay. Or, as it was officially termed, the "civilian readjustment allowance.")
tanac
Jan. 19th, 2010 09:38 pm (UTC)
This is likely to hit me pretty personally, as my dad's one of those folks likely to be losing his health and life insurance in April. He's on about 20 different medications, and has 5-6 specialists he sees once/month or so for chronic problems. they might as well just send someone over to put him out of his misery; he can't afford to pay for his medical care, and nobody in their right mind would insure him.
(Anonymous)
Mar. 8th, 2010 10:39 pm (UTC)
Looking for 9 FORD ELECTRONIC RETIREES to join me in lawsuit against Ford
Hi,

I am trying to find 9 others to join me. I am one of Ford only employees who retired in 1996. I consulted w/ an attorney but he only wishes to persue the matter if I get a group of 10 together. I am in, so I need 9 more people. Cost is $1000 each to be paid to the attorney not me.


If intersted, email me at winzsome1@yahoo.com

Thanks!
Lisa
( 8 comments — Leave a comment )

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