GM Canada's $5b Pension Shortfall
When CAW Prez Buzz Hargrove told me a GM C11 is inevitable, I wondered if Canadians might have a more realistic idea of The General's financial health, or lack thereof. The Toronto Star provides confirmation. The paper reports that GM's Ontario workers have noticed that the automaker has taken full advantage of a company- specific exemption allowing them NOT to fully fund the workers' defined-benefit Canadian pension plan. Which GM hasn't done since 1992, to the tune of $5b. [A defined-benefit plan obliges GM to pay out a fixed, agreed upon amount to its beneficiaries– no matter what's in the fund.] "My concern is that, if GM goes into Chapter 11 bankruptcy protection in the U.S. or they go bankrupt altogether and out of Canada," a retiree worried. "My pension is going to be cut nearly in half." It seems GM's legislative loophole was worth every penny the company spent acquiring it. For GM, anyway.
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monkeyboy : August 20th, 2008 at 9:27 am "“As one of Canadas largest and widely read newspapers The Star might want to look at more balanced jounalism.” Sad as it is, facts and truth doesn’t sell newspapers." Nor does it elicit hits on a website, or give bloggers much to wag there keyboard at. The truth is (as we like to say) is that facts are few and elusive. The more facts one has, the less there is to discuss. Those in possession of facts tend to hord them though they cannot be contained. Let's face the facts =O) We will know when we get there. Everything else is speculation and diversion. Of course, lets not forget that some people make a lot of money and speculation and diversion. Fact?
mikey: "victim a day Star" What a perfect phrase. Looks like Canada's big media is as bad as America's. Will Rogers said "All I know is what I read in the newspapers." Thankfully, nowadays we have other sources of information. Whatever you do, don't stop posting on TTAC.
Since Buzz didn't quarrel with the numbers, he must either agree with them or doesn't know. Either way, it isn't good. As a GM pensioner, I am concerned. But, if GM goes bankrupt, my problems will be minor compared to some people who are still raising families etc. Interesting to note that GM is selling it's National Distribution Center in Woodstock, Ontario and it's Edmonton warehouse as well. Looks to me like they are getting ready to leave Canada, regardless of what Buzz says.