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P&G, Gilette, & "Retiree Welfare Benefits"
Old 02-23-2005, 03:03 AM   #1
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P&G, Gilette, & "Retiree Welfare Benefits"

From a story in this morning's Boston Globe about how Massachusetts Secretary of State William Galvin is investigating one possible effect of the P&G/Gilette merger:


Meanwhile, Galvin broadened his inquiry into the proposed sale of Gillette to include retiree benefits. That was sparked by a Feb. 7 letter to Gillette retirees in which P&G "committed not to reduce the overall level of Gillette retiree welfare benefits, such as health and life insurance, for two years after the deal closing."

After that period, P&G pledged it would only make changes to the Gillette retirees coverage if similar changes are made for P&G retirees.

Nonetheless, the notice has Gillette retirees such as Edward G. Flaherty, a 59-year-old Hanover resident who worked at Gillette for 33 years, wondering whether P&G will cut his benefits once the two-year period expires. Flaherty, who retired six years ago, said the Gillette healthcare benefit is particularly generous, and could be one place where P&G looks for cost savings.

Flaherty said Gillette had "committed to paying 91 percent of my medical for the rest of my life. It's a great benefit. Wouldn't they want to change it?

(end quote) keeps looking like that "social contract" between the career employee and the employer may have been fiction all along. The phrase "retiree welfare benefit" is probably just a poor choice of words, but it's telling.

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Re: P&G, Gilette, & "Retiree Welfare Benefits"
Old 02-23-2005, 03:09 AM   #2
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Re: P&G, Gilette, & "Retiree Welfare Benefits"

Leaving the benefits the way it was really depends on the contractual agreement of the merger. The terms and conditions should have been specified in SEC filing (8K report?). In most cases, the takeover company is not obligated to maintain any benefit programs.

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