PACE International Union Objects to BP’s Proposal to Change Retiree Medical Plan

October 8, 2003

Nashville, Tenn.—BP’s proposed changes in its retiree medical program unfairly target employees who helped build the company, and it breaks a long-standing practice within the oil industry of funding a large portion of retiree health insurance premiums, says the Paper, Allied-Industrial, Chemical & Energy Workers (PACE) International Union.

            BP proposes to decrease its payment of retiree health insurance by 10 percent  (2% per year over five years) for current employees and retirees. The company’s payment of retiree health insurance would end for employees hired after April 1, 2004. The new proposal would affect salaried and hourly U.S. employees.

            “The employees of this company work in the richest industry in the world,” said Bill Phillips, PACE’s BP Council chair. “BP made a profit of $8.7 billion in 2002, and it hasn’t admitted its inability to pay for retiree health insurance.”

            When BP purchased Amoco and Arco, it signed agreements with the union three years ago to harmonize all three companies’ benefit plans, including the retiree health insurance.

“Now the company is taking it away,” said Phillips. “These proposed changes not only harm every retiree who ever worked for Amoco, Arco or BP, but steal the hopes and dreams of the current work force. The proposal to eliminate retiree insurance support for new employees affects the company’s ability to attract good employees, which impacts everything from the quality of business decisions to the health and safety of the employees and the communities in which they work.”

Phillips said the union is going to demand bargaining over BP’s retiree health care proposal, and is looking at organizing rallies, informational pickets, and letter-writing campaigns to elected officials and may reconsider its joint activities with the company.

“Rising health care costs are a concern for every firm, but the way to solve this problem is to push for a national health care plan in the U.S.,” said PACE Administrative Vice President Jim Pannell. “Transferring the burden to retirees and employees is not going to solve the health care crisis.  However, it will further bloat the obscene profits evidenced by the industry. PACE requested that BP work with the union to endorse the movement for a national health care system, but BP was uninterested.”

Headquartered in Nashville, Tenn., PACE represents over 3,500 workers at BP facilities throughout the U.S. www.paceunion.org