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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