Posted on 04/07/2010 7:32:28 AM PDT by kcvl
The pension plans at General Motors and Chrysler are underfunded by a total of $17 billion and could fail if the automakers do not return to profitability, according to a government report released Tuesday.
Both companies need to make large payments into the plans within the next five years — $12.3 billion by G.M. and $2.6 billion by Chrysler — to reach minimum funding levels, according to the report, prepared by the Government Accountability Office. Whether the companies will be able to make the payments is uncertain, the report concluded, though Treasury officials expect the automakers will become profitable enough to do so.
If either company’s plan must be terminated, the government would become liable for paying benefits to hundreds of thousands of retirees. The effect on the government’s pension insurer, the Pension Benefit Guaranty Corporation, would be “unprecedented,” the report said. The agency manages plans with assets totaling $68.7 billion, less than the $84.5 billion in G.M.’s plan alone.
The carmakers’ pension plans were jolted by the downturn, increased liabilities and other factors. G.M.’s plan was overfunded by $18.8 billion in 2008, and was then underfunded by $13.6 billion last year, the report said. Chrysler’s plan was overfunded by $2.9 billion in 2008 but underfunded by $3.4 billion last year.
The plans cover about 650,000 people at G.M. and 250,000 at Chrysler.
(Excerpt) Read more at nytimes.com ...
Salaried employees of GM and its spinoffs are being shifted into the government plan for pennies on the dollar. The UAW employees should get the same treatment.
There will be an attempt at another UNION PAYOFF!
Hurray! I’m so glad ‘We The People’ now own this sinking ship!
Where should I send my personal bailout check to help these poor Union saps? *SNORT*
Bailout coming.
The Teamster’s are in the same boat yet my father-in-law blames corporate greed rather than union mismanagement. Do all union members get lobotomys?
NO! Don't tell me! Let me think about it...
Why do I feel that’s where MY retirement $$$ are going??
FUBO!!
These union thugs don’t care if anyone else has a retirment fund. It’s all about them even if taxpayer’s end up footing the bill!
But they wouldn’t get the “same treatment” because if they were shifted to the PBGC program, even though there plans would be nominally capped at ~$49K/yr, they would blow up the PBGC trust and a taxpayer bailout would be necessary. And when that happens, look for Democrats in Congress and the puppet in the White House to provide some kind of adjustment to make UAW pensions whole. So, farmers in Kansas who never had a UAW pension benefit package for themselves, would be buying one for the UAW retirees. They’re already doing it with regard to retiree health benefits in the implicit taxpayer funding of the VEBA funds at Chrysler and GM in the bankruptcies.
That is the Obama administration plan. Just wait until the talk in the subcommittees about nationalizing 401Ks gets some more publicity. Then all h3ll will break loose.
Makes me feel good that I buy Hondas. I just wish I did not own GM or Chrysler.
Chrylser (Fiat) is still paying his pension.
If his pension flops, then the goobermint would pick it up.
Wether they give the UAW the same small percentage is another issue.
Definitely.
Many PBGC refugees are receiving far less than $49K.
For some, the amount is just a reminder of how they got screwed in favor of the UAW.
And don’t get me started about the coming failure of government pension programs.
Well, at least Chrysler did the best job of the big three in funding their liabilities. The workers agreed to stay with these companies and the companies agreed to fund the pensions. There is no evil here other than perhaps the companies not looking ahead and funding their obligations fully. $17 Billion for autoworkers, heck, that is what, one bomber....petty cash.
Pensions are only guaranteed up to $1200 per year by the government.
Gee!....Guess who gets to pick up the tab for this????
But we need to be our brother’s keeper( just think of UAW as your big, drunk ,retarded brother and the gubmint as their more retarded enabler .) With the big 3 automakers, $3000 to $4000 dollars of the price of a new car goes to cover “legacy” costs - health insurance and pensions for union members that no longer even work for the company. This bailout amounts to a bailout for the UAW.
I agree - I mentioned that to my acct, and he didn’t even know what I was talking about...
Right, but Wally_Kalbacken makes a good point that this might change if Obama sees his UAW base losing out.
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