Posted on 07/01/2009 6:12:21 AM PDT by reaganaut1
General Motors is using its huge pension fund in a way it never intended.
It had planned — and put money aside — for a steady march of retirees over time. But instead, tens of thousands of blue-collar workers, most in their 40s and 50s, are all becoming eligible for retirement benefits now, as the company rapidly downsizes.
And even as its pension fund faces this giant bulge in payouts, G.M. is not putting any new money in — the company is not required to make any contributions to the fund until 2013.
The longer this goes on, the weaker the fund will be and the more uncertain its long-term viability.
For now, the pension payments to its younger “retirees,” part of a deal G.M. negotiated with the United Automobile Workers union in 2007, allow the company to drastically shrink its work force without having to come up with the cash to pay severance. The payments also relieve some of the burden on social service programs in the countless factory towns and counties around the country with large numbers of G.M.’s newly jobless.
“G.M. basically raided the pension plan, by having a lot of these severance benefits paid through it,” said Douglas J. Elliott, a fellow with the Brookings Institution who specializes in financial institutions and policy.
What G.M. has done is perfectly legal. Nor is this the first time an employer has used a pension fund to pay for pruning its ranks. Well-subsidized early retirements are a time-honored practice in the public sector, where teachers often retire after 30 years and police officers can sometimes claim rich pensions after working as few as 20 years.
(Excerpt) Read more at nytimes.com ...
It's okay, they get a pain pills. The Boy-King said so.
Oh let everyone who saved give their money via taxes to the poor union a$$holes who got paid an awful lot to do very little and then didn’t save a nickle.
I’m sure Osama will allow them to jettison their pension liabilities, dumping the obligations onto the taxpayers.
That’s what has happened with the bankrupt airlines and probably every other bankrupt company that had a pension. You and I are paying for it.
I must be a cheap date. I could live on half of what that character in the story is complaining about.
Why not? He can always just print more.
Maybe Obama can get his friends at the Treasury to start printing Obama's picture on the next trillion dollars that they shovel into Democrat pet projects and left wing groups like ACORN.
I told my good friend last year when he was taking the $62,500 (skilled trades) buyout and retiring, that the union/company/government would find a way to screw all the retirees by reducing benefits/pay or we the taxpayers would have to pick up the tab. The retirees collectively grow feeble and their voices become faint. They become expendable. Government/fascist/national-socialist health care anyone?
The article never gets to the root cause, this microcosm of socialism...why it doesn’t work, its false hope, the destruction it leaves in its wake.
Thanks Obama
Did you forget that the government owns GM? Therefore, the government is setting a bad exampe for privately owned companies.
This is one of his RAT constituencies. We own GM now, so maybe Congress will declare them all retired civil servants and give them federal pensions.
;-)
The old trade unions approach, like the old AFL under Sam Gompers, always had my respect, although They discouraged technical development. The mass union stuff, though, makes no sense economically. My dad was in the oil business, rose from a roughneck to superintendent of a drilling company. No unions, but even a roughneck could make as much per day as someone working
in a Ford plant in the ‘20s, which was good wages. An industrious man could work his way up quickly. A sober man could save money. Morale was always high and men took pride in their work. I was astonished when I met my first auto workers up in Ohio and Michigan. They made good money, but were they an unhappy bunch!
I am so tired of the class war fare that Obama is encouraging. I really think that Obama HATES capitalists.
So I'm sitting in a KMart waiting for my wife--and next to a fella in his 80s....Start talking bout 'the situation'----He says he was a machinist up in Ohio and retired at age 49 years ago to come to Flor-ee-Duh....
Sheesh...Great chance of living half his life off others....Can't call him dumb !
I understand where you are coming from, but when I think of the large amounts of money taken from union workers to pay the fatcat union bosses and the parlay of it to fund liberals like Zer0, they deserve no sympathy from me.
I had a couple neighbors who retired at around age 50 from a GM plant. Neither made it to age 60.
My parents have lots of friends who have retired, and after 6-8 months, they are bored and trying to go back to work. Even my MIL who is 76 still works 3 days a week. She says it keeps her young and mentally sharp!
The ones who stay “retired” all seem to die within a few years. It’s like they have no purpose in life and just fade away.
And we’ll be working til we die.
The thing I would most love is electing some absolutely fire-breathing Conservative. Day One he is head of GM, right? I mean the Zero is head now, so obviously when Zero goes the new Pres is head of GM. New Pres appoints a car-czar who announces that GM is closing, filing chapter 7, and that pensioners will be getting 10c on the dollar. The USA is getting out of the car business, the union support business, the private pension subsidy business.
LOL. What Lord FedGov giveth, Lord FedGov can take away! Now that is CHANGE I could believe in, and some thing that future Marxist Presidents could not “undo”.
We need conservative leaders who start attacking and destroying the INSTITUTIONS that support the Marxists. This includes everything from public university tenure committees (think Angela Davis, et al) to absurd giant non-profit agencies.
Hopefully Rahm’s closing of all Republican car dealerships in America will be remembered and repaid, with interest.
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