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 ...
“Dying with dignity” will become the new patriotism.
I don’t remember the NYT whining about ‘the workers’ when Enron failed. I also don’t remember anyone bailing them out!
Well, I agree that the worst things about unions is that they remind me of animal farm. All animals are equal, but some animals are more equal than others. Leaders start out as workers but they end up living as high as the capitalists. The worst unions are the public employee unions. I was a long-time member, and local leader in a teachers’ union, and it was interesting to see how one evolved into autocratic institutions that spend most of its resources on matters unrelated to the welfare of the members. But most teachers went along, wanting to be taken care of, and uninterested in playing a role in the governing of the union.
Well, I agree that the worst things about unions is that they remind me of animal farm. All animals are equal, but some animals are more equal than others. Leaders start out as workers but they end up living as high as the capitalists. The worst unions are the public employee unions. I was a long-time member, and local leader in a teachers’ union, and it was interesting to see how one evolved into autocratic institutions that spend most of its resources on matters unrelated to the welfare of the members. But most teachers went along, wanting to be taken care of, and uninterested in playing a role in the governing of the union.
Isn’t it remarkable that what you described regarding union leaders is exactly how most members of Congress evolve as well?
Once they leave their states and surround themselves with the D.C. crowd, they forget who elected them and work for their own interests.
I believe it is an intrinsic human trait that only a few overcome.
Our founders recogized this trait and created our government in a way to suppress this instinct. Right now it is not suppressed, as people who should be paying attention are not, and the politicians are getting away with it.
We need people to wake up.
“I don’t remember the NYT whining about ‘the workers’ when Enron failed. I also don’t remember anyone bailing them out!”
Enron being in Texas was not a Wall Street Company, so it had to be dissed. Big difference. NY considers itself the hub of everything exciting and you cannot let a Texas company succeed, can you?
Did any of the families of the dead folks in Oklahoma City get million dollar payoffs from the govt like the ones in the World Trade Center?
Did you read that Obama told Columbia that they were moving closer to the free trade agreement, but that still had some work to do on unionization? Yeah, I guess Obama wants them to unionize the drug cartels.
Interesting to me that no Republican seems to be able to grab the ball for a slam dunk campaign issue:
Joe taxpayer is shelling out tens of billions so 50 yr old UAW members can get $3200/month and silver (formerly gold) plated benefits.
Maybe they can’t cut through the media clutter of Michael Jackson........
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