Will General Motors leave Detroit - and what will happen to the city?
 

distro pruned to rec.crafts.metalworking

On Fri, 22 May 2009 05:53:23 -0700, Dan
wrote:

Don't laugh. You have to count in all the bennies and that's not far off.

I'm sorry, the bennies for workers long retired (but unfunded by
MANAGEMENT) is NOT a rational cost of the present labor force.

Dan
=========
Indeed it is not.

These medical/retirement benefits are not largess by the company,
but are deferred wages, to be paid now rather than at the time
these were earned.

In retrospect, the union should have demanded the cash up front,
and the members could have spent or invested as they chose. As
it is now they have to a large extent been stiffed.

These deferred wages are just another portion of the huge secured
and unsecured corporate debt accumulated by venal/incompetent
management over the years, including everything from actual bonds
to "deferred maintenance."

In case you missed the article, it now appears that the
automotive retirement/pension fund shortfall [including Delphi,
American Axle, and other vendors] is over 77 billion.
-----
http://www.freep.com/apps/pbcs.dll/a...=2009905210697
Auto pension trouble on horizon?
$77-billion shortfall could spell trouble for younger retirees'
benefits
BY SUSAN TOMPOR • FREE PRESS PERSONAL FINANCE COLUMNIST • May 21,
2009
Detroit got handed one more ugly number Wednesday to slap us into
the reality that we must rethink our futures. Sheet metal no
longer can craft a cushy retirement. Nor can rubber, tires or
seat cushions, apparently.
Advertisement

The entire auto industry -- which would include the Detroit
Three, as well as other auto manufacturers and auto suppliers
that offer defined-benefit pension plans -- is looking at a
combined $77 billion in underfunded pension liabilities, based on
the estimates of the Pension Benefit Guaranty Corp.

We do not want to alarm anyone. So make no mistake, the rug is
not being pulled out from under most auto retirees. Many older
retirees at General Motors Corp. and Chrysler LLC face no change
in their pension payout.

But it is essential for others to know that about 45% of those
underfunded pension benefits -- or about $35 billion -- would not
be guaranteed in the event that all those plans in the auto
industry would have to be terminated.
snip
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This is where the people that took early retirement get it in the
shorts...


Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?

Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).