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Ford-UAW health care deal gets tentative OK

If this and a similar GM plan win final approval, retired hourly workers would pay for some services.

David Shepardson and Bryce Hoffman / The Detroit News

DETROIT -- A federal judge granted preliminary approval to Ford Motor Co.'s deal with the UAW to cut the automaker's health care costs by instituting deductibles and monthly premiums for hourly retirees.

U.S. District Judge Arthur J. Tarnow granted preliminary approval to the deal in a two-page order.

"The court finds that the proposed settlement falls within the range of possible approval, does not disclose grounds to doubt its fairness and includes no obvious deficiencies," Tarnow wrote.

Tarnow will hold a two-day hearing May 31 and June 1 to consider objections to the deal.

Ford will send details of the settlement to retirees by March 10.

Kathleen Vokes, a Ford spokeswoman, praised the decision Tuesday.

"We're pleased with the court's decision and will proceed with the next steps," Vokes said.

If the deal at Ford and a similar United Auto Workers agreement with General Motors Corp. receive final approval, retired hourly workers would begin paying monthly premiums, deductibles and co-payments for medical services up to a maximum of $370 a year for individuals and $752 for a family. They don't pay such fees now.

There are about 150,000 Ford retirees and dependents covered by the settlement.

Separately, U.S. District Judge Robert H. Cleland will hold a two-day hearing next week to hear objections to GM's deal to cut $1 billion a year from the company's health care costs.

More than 1,240 retirees have protested the deal.

Intervention refused

A former recording secretary for the UAW asked Cleland to intervene in the case.

He refused. Tarnow rejected a similar request.

GM said in a court filing Friday that without reductions in its $74 billion health care liability, its future is "at serious risk."

Leroy McKnight, who retired from UAW Local 1753 in Lansing, said the UAW and GM colluded to prevent retirees from having a voice in the decision to cut their benefits.

Because the UAW cannot negotiate on behalf of retirees, the union and GM are seeking court approval to ratify the agreement and counter any legal challenges.

As many as 1,400 retirees and surviving dependents were expected to file objections with the court. More than 475,000 GM retirees, spouses and dependants are covered by the settlement.

Mary Hawkins, a GM retiree from Manitou Beach, Mich., wrote an angry letter to the court before the judge's decision.

"Over the 32 years of my employment with GM, it is not fair to take this away, as I don't have the option to return to work," she wrote. "Where is the justice in this?"

Cuts opposed

Richard Romanowski, 61, retired from Ford's Rouge manufacturing complex three years ago after 38 years at the automaker.

He opposes the cuts.

"We gave up hourly wages for those benefits," he said, adding that he can remember walking the picket line for $25 a week to win these retirement benefits and how much his family had to sacrifice.

Only 51 percent of Ford's UAW members voted to ratify the deal, while the GM deal passed by 61 percent of workers, who voted in November.

Cleland has set a two-day fairness hearing for March 6 and 7 to listen to objections and may grant final approval.

GM is also reducing health care benefits for salaried retirees and restructuring its U.S. pension plan for salaried employees.

The automaker plans to cap contributions for salaried retiree health care at 2006 levels beginning Jan. 1, 2007.
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