How many employees does General Motors have? How many General Motors employees and their spouses are covered by GM’s pension plan? What is the ratio between the first and the second?
No googling or researching, please. Take a guess.
How many employees does General Motors have? How many General Motors employees and their spouses are covered by GM’s pension plan? What is the ratio between the first and the second?
No googling or researching, please. Take a guess.
http://www.freep.com/article/20081118/BUSINESS01/81118064
•General Motors directly employs approximately 96,000 people in the United States.
•Our pension program covers nearly 475,000 retirees and spouses, and our health benefits extend to about one million Americans.
Thank you, Kendall. Exactly my point. The problem today is not the cost of current workers, it’s legacy costs. In fact, it’s my understanding that most current workers have no defined benefits, or frozen defined benefits. Future benefits depend almost solely on defined contributions from employees. GM has actually done a commendable job of keeping its legacy pensions funded–something the American taxpayer should be thankful for, since a default would likely mean the responsibility for these workers would fall on the government. We should be asking ourselves: What is important to us? Is healthcare and some measure of security when you are in your vulnerable retirement years important? If so, how should it be paid for? We should also ask ourselves, how will the foreign automakers behave when they have a huge legacy burden? The answer is, nobody knows because it hasn’t happened yet. All we know is how the so-called “big three” (who are not so big anymore) have actually behaved and so far they have proven they are determined to live up to their promises. This is not a sign of weakness to be derided. How many other businesses have flagrantly abused this trust?
Tired,
Every serious student of business has been saying this for the last two decades: a shrinking number of current workers operating at tighter margins are attempting to fund benefits for an inverted pyramid of workers who are now pure, profit-draining overhead. The only thing that can keep the Ponzi scheme going is a new row of suckers at the bottom, and Uncle Sugar is queuing the taxpayers up. The Big 3 were happy to pass on the inflated costs of their absurd CBA’s to American consumers for years, and it looks like they’re going to get the last laugh again.
Congress sits in judgement of the auto manufacturers who are guilty of socking away billions to fund their legacy obligations–even though it hurts their current and future viability. Meanwhile, Congress doesn’t bother to even pretend to fund its Social Security and Medicare obligations. Hypocrisy.