Bankruptcy Allows Big 3 to Slash Pensions? That's Their Solution? What Am I Missing Here?

[K Gardner]

Granted, I've always moved from job to job and never worried about those things my parents counted on, called pensions, so maybe I'm not understanding what I think I'm hearing.

Commentators say the Big Three are quietly working on a deal to "declare bankruptcy prior to the bailout so they can cut the Legacy Money, i.e. pensions., and make the bailout work." Are people actually saying and thinking its alright to dispense with the money owed to workers at their retirement? People who, unlike me, have loyally stayed in one job working the same long hours and same routine all their natural life will get nothing? How does bankruptcy allow you to cut these benefits that people have spent their whole lives working for in hopes of being able to retire without starving?

If this is their solution, how can anyone seriously be thinking of giving these bastards ANY money?

Someone please tell me I'm "misunderstanding" what I'm hearing.

[Kalyke]

1. Actually, I think that's what Congress, including too many Democrats,

want them to do.

I don't think they're pushing this meme all by themselves. If you listen to the vieled threats of everyone from Sen. Richard Shelby (R-AL) to Rep. Nancy Pelosi (D-CA), you will see that the ruling class is attempting to use this downturn to their advantage: ie. union busting and labor slashing whilst protecting their asses.

[K Gardner]

2. This is just grossly disturbing to me. I understood they were negotiated wages, but cutting pension

money seems barbaric to me. I cannot imagine what those workers who put in 20-40 years are thinking/feeling right now.

[LiberalFighter]

9. Possibly some of those retirees are thinking illegal thoughts.

[blue_onyx]

4. Yes!!

I can't understand the Democrats. Unions have been loyal supporters of the Democrats and yet they are turning a blind eye to the US automakers. I have a great aunt who had to pull out of buying a new condo (losing a down-payment) because she doesn't know how much of her pension she'll continue receiving. So many Democrats are acting like it's awful that the US automakers have paid their employees and retirees well...it's just crazy.

Sen. Richard Shelby is so biased and nobody should look to him on this issue.

Pelosi is a HORRIBLE leader and needs to be replaced as Speaker of the House (and hopefully challenged in the 2010 primary).

[natrat]

7. notice they got a whole crew on the message boards all horny to let GM fail

[OPERATIONMINDCRIME]

3. Some Of The Pensions Are Way Over The Top, Right?

[LiberalFighter]

10. Absolutely not!!

[annabanana]

13. oh sweet lord. . "fixed incomes" . . . way over the top

sure

[asteroid2003QQ47]

18. Some, likely all, cap addicts suffer from terminal SPS too! n/t

[ProfessorGAC]

21. Define "Over The Top"

I'm somehow doubting that you have any such definition. As usual.
The Professor

[OPERATIONMINDCRIME]

28. More Than What Would Normally Be Expected, Give Or Take A Reasonable Amount.

Seriously, you call yourself Professor and need to actually have such a simple and readily understandable concept explained to you? That's fairly ironic.

[ProfessorGAC]

30. Yes I Do

And you wouldn't know smart if it landed on you.

I asked for a definition. You gave a vague opinion. What's ironic is that you think you ever outsmart anyone, you reactionary twit.
GAC

[OPERATIONMINDCRIME]

37. LOL I Run Circles Around You Son.

And the intent on what is meant by over the top as well as my spoonfeeding you the 'vague opinion' on what it means, is more than obvious to any rationally thinking person. What is hilarious to me is that you try and act all witty yourself, yet are oftentimes so off the mark, transparent and knee jerkish that all you can muster is some empty ad hominem. Well guess what pal, that doesn't impress anyone but the dolts.

So let me ask you mr smug: Can you actually respond with a whiff of intellect to the argument at hand or is the ad hominem all you've got in your eensy weensy back of tricks? :hi:

[ProfessorGAC]

38. Biggest Idiot On DU. OMC

If this gets removed by the mods, fine.
GAC

[Pithlet]

24. You cannot be serious... n/t

[OPERATIONMINDCRIME]

27. LOL Amazing That Not One Person Responding Was Able To Answer Appropriately.

I've read on multiple occasions that many of the pensions are way more than what an average worker normally gets and that they are an immense burden to GM. Is that wrong? If so, why? Any actual reasoning? I love how rampant knee jerk disease is here.

[Pithlet]

29. LOL Amazing I Know What I Do When I See Websites

where people don't actually reason and just kneejerk respond to everything. I don't go to those crappy websites like that. Easy peasy! Why would anyone waste their time at such a website like that? Man, I sure wouldn't. I got better things to do with my time. Don't you?

Where were you reading those things on multiple occasions, OMC?

[Sebastian Doyle]

31. Define "average worker"

If you put Bill Gates and your typical Wal Mart greeter in the same room and computed an "average income" of everybody in the room, it would look like a pretty good number, but it sure as Hell wouldn't reflect the reality, would it?

[ProfessorGAC]

32. Don't Confuse OMC With Facts

He's just doing his regular reactionary contrarian jerk thing.

Don't even try to reason with him. Unreasonable people cannot be reasoned with.

GAC

[OPERATIONMINDCRIME]

36. You're Projecting.

Your ad hominem attacks are more a negative reflection on your capability than mine. Can you answer the post using even a whiff of intellect or are the ad hominem hilarities all you can muster? :hi:

[ProfessorGAC]

33. Wrong Again, And Again, And Again, And Again. . . .

. . .and again, and again, and again, and again, and again. . . .

Even you should be able to grasp this point.

[Deja Q]

34. Define 'over the top', the money the people put in is *their* money.

If a person put in 20% more per month, they were acting over the top for doing so?

[NNN0LHI]

35. My Ford retirement is $2,400 dollars a month

Does that sound over the top to you?

Don

[sinkingfeeling]

5. Corporations have had the blessings of Congress for the last 20 years to 'unload' their pension

obligations. After hearing for 20 years how my promised pension was part of a 'deferred compensation' package, they were allowed to, first, change the way it was calculated (net loss of $400 a month) and then to 'freeze' my earnings used in the calculation (net loss of another $200 a month) while they moved to a 'defined contribution' plan (401K).

You see we were all told that our salaries were less than what could be made in the open market because we had these 'lifetime' benefits.... fully paid health insurance and a great pension plan. But after 30 years, I am offered a HMO plan for only $440 a month (single coverage) and a monthly check that is $600 a month less than promised.

[K Gardner]

6. I thank you for posting this - and wonder why stories like yours aren't heard as this one-sided

discussion plays itself out in front of America.

I am so sorry for what has happened to you and the other millions of people who worked all their lives to provide for their families, and for America.

[CoffeeCat]

8. Actually, this problem could be far more serious...

...than pensions.

I would not be surprised if the auto makers declare bankruptcy and perform some kind of legal
gymnastics to rid themselves of many long-term promises that they made their employees.

I was having a discussion with a group of people about the automakers, and someone chimed in and said
that at least one of the big three promised all workers "health care for life." Apparently, this is
costing them billions. Given the dire straights these automakers are in, it appears that there
is no way in hell they can live up to this promise of free health care forever.

I bet you anything that's what they do. There's no way---with their current business model
and falling revenues---that their promises are sustainable.

It's very, very scary. Tens of thousands of people are depending on this health care. People
retired and budgeted their futures, based on the fact that their health care would be provided.

And now, it's possible that the health care will be gone---now pensions, too?

Many of these people are boomers, and they will need good health care, as they age.

I also saw on CNN yesterday, that one of the "big three" wants to dump salaries that were guaranteed
to employees who were laid off. They're seriously talking about dumping that.

It's frightening to contemplate what will happen to all of these people--who were promised so much
and for much of their lives--counted on pensions and health care being there for them.

If the bankruptcy does happen, and people lose out like this---it will be a major crisis.

[K Gardner]

11. As usual, TS, this needs to be an OP of its own. Excellent points !

[MiniMe]

20. The unions and the workers bargained for their pensions and health care benefits

They probably gave up some pay raises or had them reduced. This is totally disgusting.

[leftofthedial]

12. you're missing the real agenda, which is the class war

this is the time of the final battles.

the middle class and working class have no representation in the proceedings.

[K Gardner]

14. You noticed that too, huh? And its playing out on national TV.

[annabanana]

15. I guess none of these people will ever get old & unable to work anymore..

I guess all these people are immortal and eternally healthy. And they have no parents or grandparents. And hundreds of rich children...

Nothing else makes sense..

[malaise]

16. I'll support this

when Congress, the financial sector and the auto industry give up their pensions - in other words Fuck this idea.

[SoCalDem]

17. It's what big-business usually does..

They steal labor from their workers for decades with " you pass up X% of your raise, & we'll give you enhanced pension benefits", and workers do so , in good faith..and then when too many have retired or soon will, the company bellies-up, and dumps them into PBGC (TAXPAYER FINANCED) at 40cents on the dollar with NO health benefits..and that;s what they got for passing up more money in every paycheck of all those years.. and they have no choice in the matter & no time to do all those years of wasted labor over, somewhere else..

[ljm2002]

19. That's always been their preferred solution...

...and until we peons force the fat cat corporate greedheads to slash executive pay, it will continue to be that way.

It's the damned executive pay packages that are breaking their bottom lines. That, and the private-insurance-led health care debacle that we have in this country.

Both of those could be fixed. Show me an executive who is making $5M, I'll show you someone who could live on 25% of their current income and still live very, very well.

But it's always their option, after they've stolen their workers blind throughout their working years with anti-union policies, wage deflation, etc. -- to then rob them once again as they age into retirement.

And of course, the bankruptcy judge could make an arrangement other than putting workers at the end of the line for who gets what in the settlement. But they never do...

Self-serving bastards, all of them.

[Nickster]

22. It means they get to dump their pensions on the taxpayers. The PBGC takes over the

pension obligations and pays out what it can from the payments made by corporations.

http://www.pbgc.gov/workers-retirees/benefits-information/content/page13181.html

What PBGC guaranteesPBGC guarantees "basic benefits" earned before your plan’s termination date (or the date your employer’s bankruptcy proceeding began, if applicable), which include:

Pension benefits at normal retirement age
Most early retirement benefits
Annuity benefits for survivors of plan participants
Disability benefits (see exception below)
PBGC does not guarantee:

Health and welfare benefits
Vacation pay
Severance benefits
Lump-sum death benefits for a death that occurs after the date the plan ended
Disability benefits for a disability that occurs after the plan’s termination date (or the date your employer’s bankruptcy proceeding began, if applicable)
Legal Limits on PBGC's guarantees

Generally, PBGC does not guarantee any monthly pension amount that is greater than the monthly benefit your plan would have provided if you had retired at your normal retirement age.
The maximum amount that PBGC guarantees is set each year under provisions of ERISA. For more information, see: Maximum monthly guarantee tables
Higher limits may apply for people who met their plan’s requirements for a disability pension (whether they are receiving a disability pension or a non-disability pension) before the plan’s termination date. For more information, see “Guarantees for disabled participants.”
PBGC may not fully guarantee your benefits if your plan was created or amended to increase benefits within five years before its termination date.
If the plan terminated while your employer was in a bankruptcy proceeding that began on or after September 16, 2006, guarantees are determined as of the date your employer’s bankruptcy proceeding began.
Additional limits may apply for certain airline industry plans.

[KoKo]

23. Yes...it seemed that way from what I heard. A couple of Dems stood up against this...

but basically Dodd is Senator from a state that has Hedge Funds as his constituents for much of his funds...so I imagine he will have to take their demands into consideration.

And...so many Dems vote with Repugs from the Southern States...I imagine the Unions will go down over this one. :-( Bleak House! Bleak Senate! Charles Dickens, RULES!

[muriel_volestrangler]

25. What do the unions have to say about it?

If they understand it the same way you do, then you're probably right.

Which commentators have you read/heard saying this? There was this article, for instance, but it doesn't mention pensions or retirees explicitly.

[hay rick]

26. Pension Benefit Guarantee Corporation

In case of bankruptcy, pension obligations (and assets) would be taken over by the PBGC. There is a cap on benefits (about $51,000/yr.), but I doubt that many auto workers would be affected. The cap did effectively slash many pilot's pensions when the airlines went through their round of bankruptcies.

The PBGC has funding issues of it's own. One or more auto bankruptcies might make the PBGC itself insolvent. GM's pension plan was overfunded at least until very recently. I don't know if GM has raided their pension fund while they are twisting in the wind. I assume Ford and Chrysler have underfunded plans.