The deal, known as the Shy Plan, is what governs most Navistar retiree health care coverage. The plan was the result of a lawsuit brought against the company by a group of United Auto Workers members that included lead plaintiff Arthur Shy, a UAW Local 402 member.
Under the agreement, the release said, the company transferred $1 billion in 1993 to trusts set aside for retiree health care funds. The deal also called for a permanent and fixed reduction in the company’s future health care obligation to $1 billion.
The company’s pleading states, “Just like in 1993, Navistar finds its competitors scaling back even further on retiree health care costs. Indeed a number of Navistar’s direct competitors have ‘gotten out of the retiree health care business altogether.’ ”
The company states it is “simply seeking enforcement of an agreement to cap its obligations to $1 billion” and is facing difficulties resulting from the “failure of the retiree representatives to abide by the 1993 deal, which now causes Navistar’s obligations to swing wildly.”
The company announced in April it would require all Shy Plan participants to enroll in Medicare Part D and the Silverscripts program for their prescription drug coverage as of July 1, which would increase monthly premiums by $35 per person, according to UAW Local 402 President Jason Barlow.
On April 26, the International UAW filed a motion in U.S. District Court asking that the company be enjoined from making the announced changes because the organization believes an existing agreement prohibits the company from making such a change.
In a letter dated April 28 sent to all eligible participants, the International UAW stated the company’s “attempt to unilaterally change to the Shy plan’s prescription drug benefit is a blatant violation of the health care Settlement Agreement agreed to by Navistar the UAW and retirees in a litigation settlement in 1993.”
Navistar’s perspective differs.
The company’s goal as stated in the release, “is to implement the 1993 agreement, or create a new agreement that achieves the same intent of the 1993 agreement, which is to achieve long-term coverage for retirees and a competitive balance for the company.”
Contact this reporter at (937) 328-0371 or elroberts@coxohio.com.
About the Author