While You Were Sleeping: April 9th, 2015
April 9th, 2015 8:40 AM
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In a move that could dismantle one of the pillars of traditional auto worker compensation, GM is seeking to end defined-benefit pension plans for new hires at its Oshawa plant.
- CAFE standards might get even tougher, according to Ghosn, other CEOs.
- Aston Martin CEO says a crossover is key to the company’s survival.
- Exxon is no longer the world’s most valuable oil company.
- GM wants to end defined benefit pension plans, where employees will receive a guaranteed amount for life.
- BMW isn’t planning on moving into the sub-$30,000 price bracket.
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@ttacgreg I couldn't agree with you more. The debate on that subject , could go on forever, and it has. However, for the here, and now, the Canadian auto workers{ UNIFOR} are fighting for their very survival. Their back is against the wall. All the placard waving, feet stomping, and threats, isn't going to stop General Motors from closing the doors. Those days are past. Maybe future generations, will have to deal with it. For GM to agree to keep Oshawa Flex, and Metal Fab open, they want, uh.... make that "demand" something very sweet on the table. Defined contribution pensions, will happen
Ultimately, pensions are doomed to fail. Companies go for pensions because they can pay less now and worry about defaulting on pensions 20 years down the road. Employees go for pensions because they think they can work for a tiny bit less money now and get a huge windfall later. There's no free lunch, and the reality of the situation is that it can't work out well in the end. What is so wrong with employers simply paying employees the market wage for the work done when the work is performed and letting employees do with their earned money whatever it is they want to do with their earned money.
I don't get the cheerleading here for this backward step for workers. Defined benefit pensions are/were a valuable perk, achieved through tough bargaining with strikes. Pendulum's swung the other way now. Too many workers globally chasing too few jobs thus depressing the going rate for labor. The 1945 - 1975 Middle Class Golden Age here in the USA is looking more and more like a blip in history. At least there's some slight upward movement at the bottom - Walmart and McD's, but it isn't much.
Defined benefits will happen in Oshawa. If UNIFOR fights it ,GM will walk ... Outside of government DB pensions are basically extinct. With an aging western world, I would argue that they will be eliminated by governments after the next financial crisis ( at least for "future employees" )