Although it has been telling the world how successfully it has recovered, Unisys Corp made clear at the annual meeting last week just how parlous the company’s condition remains. Faced with a band of former employees livid that the company is phasing out payment of medical expenses for life for its retired employees, the company said the phase-out, over three years, was essential to the survival of the company, which remains on the fragile edge of recovery. Chairman James Unruh said the decision had been painful for Unisys, but that the company saw little choice. Due to a change in federal accounting standards, Unisys says, it would have been forced to take $700m in one-time charges against earnings if it did not cut the benefits, and that would wipe out one-third of the still debt-burdened company’s net worth. It also could not afford the $100m in annual costs it would face to keep the programme going. Employees’ representatives counter that many that accepted early retirement offers would never have done so without the promise that medical expenses would be covered for life. Health care is not extraneous, it’s a matter of life and death and it cannot be cut, Democratic Senator Harris Wofford of Pennsylvania told a rally outside the meeting in Philadelphia; several suits against Unisys have been brought over the issue.
