GM retirees watch, worry as day of reckoning nears

Sun Apr 26, 2009 5:21pm EDT
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By Soyoung Kim

DETROIT (Reuters) - John Martinez, a former autoworker, feels as though he is watching his future sink as General Motors Corp slips closer to failure.

Pressured to take an early retirement in April, Martinez had been pinning his hopes on GM's once-generous pensions and health-care benefits to help look after his four children and his disabled father, also a GM hourly retiree.

But with the 100-year-old industrial icon teetering on the brink of bankruptcy, Martinez and the nearly 1 million other Americans who rely on the automaker for healthcare and pensions face new risks and heightened uncertainty.

"It's scary. It's like I don't know my future," Martinez, 51, said at his house in Lincoln Park, a working class suburb of Detroit. "If they go bankrupt, I'm at their mercy."

Martinez is looking for a new job but remains cautious about his prospects of finding something quickly in Michigan where the jobless rate led the nation at 12.6 percent in March.

"I never wanted to leave GM. I am still too young," Martinez said. "If I lose any more, I don't know if I can sustain mortgages and bills."

GM has until the end of May to win deep concessions from bondholders and the United Auto Workers union. The Obama administration has said bankruptcy is an option.

At stake is the future of some $20 billion in debt GM owes into a retiree health-care trust that the automaker and the UAW agreed to create as part of a cost-saving contract in 2007.   Continued...

<p>GMC cars are displayed at the Peoria Pontiac GMC car dealership in Peoria, Arizona April, 25 2009.REUTERS/Joshua Lott</p>