The People Vs The People's Car Company

Cammy Corrigan
by Cammy Corrigan

The Automotive World reports that Ford has agreed to a settlement with non-union employees and retirees who incurred stock losses. The plaintiffs brought the suit against FoMoCo because they lost billions of dollars investing their 401k’s into Ford during 2000-2006; a period when Ford’s stock price plummeted. The plaintiffs argue that Ford should not have allowed them to invest huge portions of their pension plans into the company. Now Ford’s defense (which some say invokes a level of personal responsibility) is that the claimants had plenty of time and opportunity to manage their pension plans and leave if they so desired. Who’s right and who’s wrong here? I’ll leave the Bill O’Reillies and Michael Moores of this world to debate that. Or TTAC’s Best and Brightest, whoever is available sooner…

Ford, despite their plea of innocence, has agreed that if it reinstates company match to retirement plans in the next three years, Ford’s “match” will be in the form cold, hard cash, instead of stock. Ford will also pay the legal fees for the claimants and notifying individuals of the settlement. In addition to all of this, Ford has also agreed to offer free financial advice to the plaintiffs for four years. I was going to insert a “Bernie Madoff” joke but that was too cheap….even for me.

Cammy Corrigan
Cammy Corrigan

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  • Kendahl Kendahl on Sep 02, 2010

    "investing a large percentage of one’s portfolio in the stock of the company you work for is a bad risk" It depends on the company. If I had left all of my 401k in the stock of the company I retired from instead of moving it to a well recommended mutual fund, I would now be worth $2 million. As it is, the money I did leave in their stock has been my best performing investment.

    • See 1 previous
    • ClutchCarGo ClutchCarGo on Sep 02, 2010

      The reason that it's a bad risk is that you're putting all of your eggs in one basket. If the company goes bust you lose both your job and your investment.

  • Obbop Obbop on Sep 02, 2010

    During the indoctrination for the new group/gang/mob hired by the large firm prior to commencing productive money-making work the corporate droid who had, over the decades, advanced from in-the-shop upon-the-factory-floor blue collar ant-like critter to lower-level semi-white collar corporate cheerleader of dubious value boasted of his decades of investing with the firm's stock-option buying plan with a company contribution plan that maximized the number of shares he was able to buy and how his retirement in three years would allow many years of ease and luxury upon the Caribbean island he had already selected to buy land and shelter upon and how the current stock price of $75 bucks or so per share would make him rich rich RICH when he sold his shares. A little over a year later, four months before the mass lay-offs commenced, the jobs being sent outside the USA (bye to the only job I ever had with "real" benefits) the stock's price tumbled drastically with no real warning, to less than three bucks per share and never rose again. All those shares bought when the stock was $20, $30 up to $75 per share now cashable inable in for $2.50 or so per share. I wonder how that boasting share holder is enjoying that retirement? Of course, the firms' "regular" pension was still in force and was based upon funds placed in trust and fairly well protected I believe.... the "traditional" pension almost impossible to find for folks in my socio-economic class and disappearing quickly so I do not feel too sorry for the one boasting of his amassed HUGE pile of bucks that likely disappeared as the firms' stock withered akin to the desire, dreams and other implanted propaganda within the masses' minds by the elite class rulers of the scam that is financial USA commenced falling as the class war took firm hold upon the many systems within the USA. Rejoice, for the dumpster is thine friend, brethren, and the bounty within should assist in preventing mass starvation as witnessed in so many other countries.... as long as local authorities, lackeys of the ruling elites, refrain from adulterating the last-chance vittles within by dousing the comestibles with ammonia or other adulterants (as some locales proscribe to keep the undesirables moving along).

    • Mikey Mikey on Sep 02, 2010

      @ obbop I prsonally know of at least ten GM salary guys ,that have lived that very scenerio. Recently I knocked a few Beers back with a former General foreman. He went salary in 1973 and maxed his company stock for 34 years. He sold it for five dollars in early 2009. I truly felt sorry for the dude. BTW ..Your stuff is pretty deep, but you got to be one of the brightest of the B&B. I really enjoy reading your comments.

  • Skor Skor on Sep 02, 2010

    Will we never be rid of this parasite class of two legged vermin commonly known as lawyers? I can honestly say that I hate no group except lawyers/politicians, and my hatred for them grows daily.

  • Don1967 Don1967 on Sep 02, 2010

    Investor complaints over suitability (ie: recommending a junior mining stock to a widow) may be legitimate, but only in a professional relationship between financial advisor and client. Ford is an automaker. Its responsibility ended with the signing of the paycheques, and these employees should take their medicine like everyone else.

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