GM Drops $4b On Underfunded Pensions
As of last December, GM’s pension accounts faced a $17b shortfall, raising a real concern about the long-term viability of the bailed-out automaker. With its IPO put to bed, GM is now announcing that it will pay $4b into its salaried and hourly pension accounts, and plans on adding another $2b in stock to the accounts by year’s end. That roughly approximates the $5.9b that GM will have to pay by 2013, which still leaves a $6b minimum payment due by 2014. Add that to the billions likely required by its Opel and Daewoo divisions, as well as the billions needed to pay back taxpayers, and it’s clear that GM’s dwindling cash pile still faces considerable demands. But at least the firm isn’t pretending like its pension shortfalls don’t exist.
More by Edward Niedermeyer
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Hello. This is the PBGC. May I help you?
The bankruptcy failed because the new GM assumed a debt of the old GM that they will never be able to pay -- the pension funds and retire benefits. A rational debtor not beholden to the Democrat party and their union goons, would have walked away from that mess.
PBGC already has my diminished Delphi pension. If it will be there when I retire. Still, I suppose it's better than nothing - and maybe safer than still having it with GM ;-)
What is this, another day another dig at GM. You state "That roughly approximates the $5.9b that GM will have to pay by 2013, which still leaves a $6b minimum payment due by 2014. " So GM has by the end of 2010 done what it said it would do by 2013 - ie 3 years early. What the hell is wrong with that. Also the $6 billion for 2014 is four years away. I think we can quit worrying just yet!