Nissan drops company health care for US retirees
Guest
Posts: n/a
Nissan drops company health care for US retirees
DETROIT February 6, 2006; Reuters reported that Nissan Motor Co. Ltd. is dropping company-sponsored health-care coverage for its retired manufacturing employees in the United States and will instead pay them an annual stipend.
Also, people hired at Nissan North America after January 1 will not receive a company pension when they retire, but will be offered a plan similar to the 401(k) investment strategy.
The changes are part of an effort to remain competitive in the automotive industry, Nissan said on Monday.
"To assure a secure future for all and to support Nissan's ability to remain competitive, the company is changing the medical plan benefit for retirees over the age of 65," the company said in a statement.
Starting next year, Nissan will pay retirees an annual stipend of $2,500 to supplement Medicare coverage and for any out-of-pocket medical expenses, Nissan spokeswoman Julie Lawless said.
Spouses of retirees are also eligible to receive the stipend, which will rise 3 percent each year, Lawless said.
Nissan is solving in advance a problem that troubles General Motors Corp. and Ford Motor Co. The two largest U.S. automakers are saddled with mounting "legacy costs" from health-care and pension plans. GM has said that health care for its U.S. workers and retirees adds about $1,500 to the cost of each vehicle, while Ford estimates the cost to be around $1,200.
About 12,200 salaried and hourly employees at Nissan's manufacturing division in the United States will be affected by the change. Employees at company headquarters in California are not affected.
Nissan said it has about 500 retirees and expects the number to grow to 3,500 by 2015.
Also, people hired at Nissan North America after January 1 will not receive a company pension when they retire, but will be offered a plan similar to the 401(k) investment strategy.
The changes are part of an effort to remain competitive in the automotive industry, Nissan said on Monday.
"To assure a secure future for all and to support Nissan's ability to remain competitive, the company is changing the medical plan benefit for retirees over the age of 65," the company said in a statement.
Starting next year, Nissan will pay retirees an annual stipend of $2,500 to supplement Medicare coverage and for any out-of-pocket medical expenses, Nissan spokeswoman Julie Lawless said.
Spouses of retirees are also eligible to receive the stipend, which will rise 3 percent each year, Lawless said.
Nissan is solving in advance a problem that troubles General Motors Corp. and Ford Motor Co. The two largest U.S. automakers are saddled with mounting "legacy costs" from health-care and pension plans. GM has said that health care for its U.S. workers and retirees adds about $1,500 to the cost of each vehicle, while Ford estimates the cost to be around $1,200.
About 12,200 salaried and hourly employees at Nissan's manufacturing division in the United States will be affected by the change. Employees at company headquarters in California are not affected.
Nissan said it has about 500 retirees and expects the number to grow to 3,500 by 2015.
Zombie Slayer
Joined: May 2004
Posts: 6,053
Likes: 3
From: East Bumble F, NJ
While this is unfortunate for retirees, this is becoming a much more common occurance for US companies in all industries. The costs of retiree health care are skyrocketing at an alarming rate and most companies are seriosly in jeopardy of becoming "unprofitable" if these costs were to be left unchecked.
Being the the HR/Payroll field I have seen the effects of heath care costs first hand.
Being the the HR/Payroll field I have seen the effects of heath care costs first hand.
Thread
Thread Starter
Forum
Replies
Last Post
bad co
Car Chat
18
Jul 30, 2009 09:49 AM
Gojirra99
Car Chat
6
Dec 7, 2005 10:06 AM
LexusLuver
Car Chat
15
Jan 5, 2005 10:20 PM
