Basil Chapman retired in 2002 from ACF Industries, a railroad car manufacturer in Huntington, West Virginia. Now only 60, he had worked for more than 38 years with the company. Most of that time, he was exposed to heavy fumes as he painted the cars inside and out.
Not surprisingly, Chapman eventually developed emphysema, a condition that forced him to retire early. In doing so, he did not worry about health care coverage since his union had a contract that provided ample lifetime benefits. In December of 2003, however, he discovered to his shock that the company was reneging on the agreement and forcing him to pay for some of his health insurance.
What made this change so shocking was that Chapman’s union had foregone higher wages in order to get wider coverage. The bargaining unit, chaired by him, had made it a point to get the agreement in writing so as to bind the company. Now ACF claimed to be free to override that contracted provision, which had assured retirees of ongoing health care.
My knowledge of Basil Chapman comes from a Public Broadcasting System program called “The Broken Promise.” It belongs to the series entitled NOW and is hosted by David Brancaccio, who has succeeded Bill Moyers. This program will be shown on Boston’s Channel 2 on Friday, April 1, at 8 P.M.
“The Broken Promise” will be repeated on Sunday, April 3, at 11 AM on WGBH 44. If you are in the Comcast listening area, you will also find it broadcast on that same Sunday at 8 PM as part of WGBH World, Comcast 209.
As if Chapman’s loss of his promised health benefits were not sufficient grief, his company, almost incredibly, has sued him. In a ploy to put him and other retirees on the defensive, ACF has taken Chapman to court. The company has done so claiming that, by reason of the retirees planning to sue, there exists a controversy.
Wall Street Journal writer Ellen Schultz calls this move a “sort of preemptive strike” by which companies put their retired employees on the defensive. The corporations that do this go to circuit courts with a history of siding with employers on these issues.
Another person spotlighted in the program is Ken Bottolfs, formerly employed by General Tire (now known as Gencorp). When he first retired, the company was providing almost complete coverage for Ken and his wife. But in 2000, the company began charging them $180 each month. By now Ken is 83 years old and is paying a whopping $768 each month, an amount greater than his entire pension.
Like many other retired employees, Bottolfs is not without sympathy for the companies needing to face large and constant rises in health care costs. However, these costs average out to ten or twelve percent annually. By contrast, the cost to retirees for coverage has gone up as much as 500 percent.
The explanation for this stupendous discrepancy is that many companies now have set limits on the amount they will pay for each retiree. Gencorp, for example, has allocated $2700 per annum for each one, with the retired employee needing to pay the costs beyond the cap. For Ken Bottolfs, that meant paying almost $11,000 last year, an amount that will beggar him
As journalist Ellen Schultz has discovered, if retirees drop out of the employers’ health care coverage, then the companies actually make money doubly. That happens because not only can they stop paying for those former employees but also they can remove the liabilities from their bottom line.
The two retirees featured in the program stand for many others in their own companies – – ACF and Gencorp – – and in many other companies as well. Many thousands have seen contractual promises broken by fiat. They are left with little or no recourse, since large corporations have the resources to beat them in court or to tie them up legally for years.
The two men who figure prominently in the program – – Basil Chapman and Ken Bottolfs – – are by no means fiery anti-company agitators. Rather, they seem sad and disillusioned that the companies to which they gave so much (even health in Basil’s case) have acted so callously toward them and their fellow retirees. For the sake of profits, the corporations do not scruple to wield cynical tactics against them.
To be sure, not every company weasels out of contracted commitments in this way. Those many that honor their pledges deserve to be applauded. One can only hope that the bad example of the two firms singled out here will not prove contagious. Americans who have labored long and faithfully to produce goods and services for the community have every right to be provided with health care and not be driven into penury in their later years.
Richard Griffin