Should Taxpayers Be Funding GM's 48 Year Old Retirees?

Discussion in 'Economics' started by gnome, Feb 25, 2009.

  1. gnome


    This from Autospies...

    "... GM's new restructuring plan seeks an additional $16 billion in government aid -- for now. Chrysler wants an additional $5 billion. The $30 billion that General Motors has either received or requested since December doesn't count the $8 billion it wants to develop fuel-efficient cars, and another $6 billion it's soliciting from foreign governments.

    Make no mistake, there have been many bright minds in the American auto industry over the years -- at the automakers, the United Auto Workers union and the components companies. Most of them saw today's troubles coming for years, even decades.

    "I frankly don't see how we're going to meet the foreign competition," said Henry Ford II, then chairman and CEO of Ford, on May 13, 1971, right after the annual shareholders' meeting. "We've only seen the beginning," he predicted. Regarding Americans' increasing preference for small cars, he declared: "Mini car, mini profits."

    That was a couple of years before Detroit agreed to let autoworkers retire with full pension and benefits after 30 years on the job, regardless of their age. In practice, that meant a worker could start at age 18, retire at 48, and spend more years collecting a pension and free health care than he or she actually spent working....
  2. Lucrum


  3. gnome


    I believe that comment about "Mini car, mini profits"... is the main reason the Gummint categorized SUVs as "trucks" and not cars...


    1. They wouldn't have to meet the MPG standards of cars, and

    2. GM could keep selling lots of SUVs where they made $5,000 per unit... in order to keep funding UAW demands...

    So, what happens to UAW when GM can't produce enough profit per vehicle to satiate the UAW? Do taxpayers pay the difference?

    I think that's what GM is asking for right now with bailout money.... Taxpayer Money down a rat hole...
  4. logikos


    Pensions, like most investments, depend on asset inflation to stay solvent. With assets such as real estate and stocks in a deflationary or stagnant period that can last decades, companies like GM will be forced to restructure their pension plan just to stay in business.
  5. the same thing can happen in the military. i have an uncle who went into the navy right out of high school. he retired in 20 years as a young man recieving benifits and started a civilian career. he has now been retired recieving benifits longer than he was in the military.
  6. If we let GM go Bk, PBGC (Pension Benefit Guaranty Corporatione) will be left holding the bag, which is the taxpayer.