Delphi, the parts maker that has been spun off from GM and in bankruptcy since 2005, has submitted a request to a bankruptcy judge to relieve the company of its health and benefit obligations to salaried retirees, beginning April 1st. With the change, Delphi would be relieved of $70 million in obligations per year and be able to remove $1.1 billion in health care debt from its books. A hearing on the proposal will be held in New York City on Tuesday.

Retirees have hired attorneys, and 75 of them have personally written to the bankruptcy judge in charge of Delphi’s case, Robert Drain, to object to Delphi’s proposal, which would leave them without health insurance. Delphi employees use the company’s health insurance until they are eligible for Medicare at age 65. Many say they have pre-existing conditions and wouldn’t be able to find other health coverage.

Delphi responds to its retirees by saying that without the cuts, it will never emerge from bankruptcy; previous plans for reorganization didn’t account for the woeful auto sales of last year.

“If this cost is such a drag that the company won’t survive unless you eliminate it, it’s pretty serious. It’s not a position that you’re going to see very frequently taken and it puts a judge in a tough spot.” –Douglas Bernstein, managing partner of law firm Plunkett Cooney’s Banking, Bankruptcy and Creditors’ Rights Practice Group

The attorneys of retirees are asking for health care concessions, if granted, to be negotiated between the company and retirees directly as is customarily done when such cuts are made.

Other retirees object to the fact that hourly-paid union workers will retain coverage while the benefits are stripped from those who were non-unionized and had salaries.

“Nothing in life is fair, we all know that fact. But I want you to look me in the eyes and tell me that you feel it fair to take away health care from the salaried group and allow the union members to retain coverage.” — Nancy Shade, 59-year-old retiree