A bankruptcy judge on Thursday ruled that a group representing General Motors salaried retirees cannot form a formal committee to negotiate with the automaker as it attempts to reorganize and emerge from Chapter 11 as a new company.
U.S. Judge Robert Gerber said that since GM had the right to modify or terminate the retirees' health care and life insurance benefits before they filed for bankruptcy protection, the retirees can't challenge the automaker's ability to do so now.
"While I do understand the importance of this to the retirees, I can't grant the retirees rights that they don't have outside of bankruptcy,"Gerber said in issuing his ruling.
As part of its restructuring plan, GM plans to continue to pay health care and life insurance benefits for its 122,000 salaried retirees and their surviving spouses, but those benefits are expected to be reduced and the retirees will be forced to shoulder a larger share of their
health care costs.
Retired hourly workers whose benefits are dictated by contracts with unions like the United Auto Workers are not affected.
Neil Goteiner, an attorney for the salaried retirees group, said that given what's at stake for the retirees, the cost of a committee was warranted.