Janesville69.5°

Allied benefits could hit the road

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JAMES P. LEUTE
June 29, 2010
— Unless a federal judge intervenes, about 70 former workers and retirees of Allied Systems in Janesville will soon lose what they believed were lifetime health insurance benefits.

Allied closed its Janesville shipping yard in April, putting about 100 people out of work.


For most of its history, the operation handled outbound and inbound shipments of vehicles by both truck and rail. Workers drove locally built vehicles to the massive yard bordered by Kellogg Avenue and Jackson Street. There, the vehicles were assigned to outgoing loads or mixed with incoming deliveries for shipment to dealerships in the Midwest.


Allied’s operation here dwindled when General Motors closed its Janesville plant in late 2008.


“Some of these people could find themselves in dire financial straits,” said Mike Marcks, first vice president of United Auto Workers Local 95, the union that represents Allied’s office and shop employees.


“Some of them could find themselves in bankruptcy.”


Larry Butler, who retired in 2000 after a 30-year career with Allied and its predecessors, agreed with Marck’s assessment.


“It will be devastating,” Butler said. “Some people have cancer; others have nursing home bills.”


Butler said he attended a recent meeting of about 65 former Allied workers and retirees, and “every one of them was under the impression that the health insurance was a lifetime benefit.”


Marcks said Allied planned to cut health, life, prescription drug, vision and dental coverage for the employees and retirees when the operation closed in April.


Local 95, however, agreed to changes that prevented the immediate cancellation of health insurance.


The union, however, learned June 21 that the coverage would end with the current contract June 30, which is Wednesday.


The company contends that the insurance was not a lifetime benefit, Marcks said.


A reporter’s calls to Atlanta-based Allied were unsuccessful.


Marcks said UAW attorneys are seeking a temporary restraining order that would prevent an abrupt end of benefits.


“We’re hoping that sometime this week the judge will grant the order and then issue a final decision in 30 to 60 days,” Marcks said. “If things go our way, we’re hoping the judge would extend those benefits through June 30, 2011.”


Marcks said the abrupt end to benefits would be difficult for workers and retirees with pre-existing conditions because new federal rules assuring them coverage are not yet in place.


Marcks said the company’s pending action does not affect pensions, which he said are protected by the Employee Retirement Income Security Act of 1974 and its Pension Benefit Guaranty Corp.


“It’s not like the company is going bankrupt or out of business,” Marcks said.



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