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They have a young workforce and their pension payout is peanuts compared to american comps.
35 years ago, it was part of what you went to work based on just like today. They would offer x pension as an incentive which means that it was part of the base cost of having an employee. Same as offering to contribute to a 401k.
If someone came to me today and said I had to give up all of the money my employer put into my 401k I'd tell them go F themselves.
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GM says its total hourly labor costs are now $69, including wages, pensions and health care for active workers, plus the pension and health care costs of more than 432,000 retirees and spouses. Toyota says its total costs are around $48. The Japanese automaker has far fewer retirees and its pension and health care benefits are not as rich as those paid to UAW workers.
From the article: Ouch!
As I've been saying, the GM union issue isn't pay, it's retiree benefits. And it's a huge, overwhelming number.
Whats your take on a fix?
It's tough to spend US taxpayer dollars to fix a company's problems, but (1) the makers wouldn't be in this shape except for the economic collapse and (2) the tax revenue from these companies being in good shape plus the social service money we'd pay to keep all those unemployed people from starving and freezing would be a hell of a lot more than that. Not to mention that human beings have a God-given ability to create and produce, and frankly it's a sin against nature for people to have no work to do.
go gettum,
og
However, if GM declares bankruptcy, one of the main things it can do is shed its pension program. The pension would then get handed over to the PBGC which is already underfunded by billions of $$.
I think the thing that sets the Toyota pension apart from the UAW and other typical union pension programs is there is no "years of service" option. You don't automatically get partial to full retirement benefits depending on how many years you worked. Looks like it is solely based on retirement age.
http://pensionpulse.blogspot.com/...ms-pension-fund.html
An old article from 2005 but very informative:
http://www.businessweek.com/...9/b3932001_mz001.htm
From the first linked article:
"In a report released Wednesday, the Center for Automotive Research in Ann Arbor, Mich., outlined what would happen in two separate scenarios if General Motors Corp., Ford Motor Co. and Chrysler LLC were forced to scale back or shut entirely. If all three Detroit manufacturers were to cease operations, the U.S. economy would lose 2.95 million direct and indirect jobs in the first year. Governments would lose at least US$156.4-billion in taxes over the first three years. If Detroit cut output and employment by 50% to meet ever-shrinking market share, which would mean contraction by two of the automakers, 2.46 million jobs would be lost initially. Governments would lose US$108-billion in revenue over three years, according to the analysis. "The circumstances are such that either of these scenarios is possible, and indeed one or the other is probable, within the next 12 months," the non-profit think-tank said."
Never mind if something you hear on the radio isn't even logical and doesn't make any sense - if you hear something on the radio that reinforces what you want to think, then it must be the truth. It's like Churchill said, "The best argument against democracy is a 15 minute conversation with the average voter." Gosh, Ger, I never knew you met Churchill.
One other note - these senators didn't have the votes to defeat the bill, they just had enough votes to prevent the Senate from being able to break a filibuster. The majority couldn't bring the bill to a vote because the minority was big enough to filibuster it to death. So the majority spoke in the house, passed the bill, sent it to the Senate and the minority managed to kill it there. These senators don't like bailouts? Then why didn't they do the same thing to the 700 billion dollars for financial services companies? Because that 700 billion was GOOD for Toyota and this 15 billion was BAD for Toyota.
It's pretty pathetic when Senators represent Japan so strongly they're perfectly happy to push America into a depression.
U.S. Senator Richard Shelby (R-Ala.), ranking member of the Senate Appropriations Subcommittee on Commerce, Justice and Science, today announced that $85 million will be included in the Consolidated Security, Disaster Assistance, and Continuing Appropriations Act, 2009 to aid the struggling fishing industry around the nation. Following today’s action by the Senate, this bill will go to the President for his signature.
“As a result of the volatile hurricanes that continue to plague the Gulf Coast, Alabama fisheries have taken a significant economic and ecological hit,” said Shelby. “These unpredictable weather events, compounded with high fuel prices and increased restrictions on the fisheries, culminate in shrimpers and fishermen who are struggling to stay in business. This funding will provide much needed assistance to an industry that is a vital part of the Alabama economy.”
These funds may be used to alleviate expenses related to fishery failures, fishery resource disasters and regulations on the fishing industry for declared disaster areas across the country.
OK, so we need $85 million to bail out a fishing industry in Alabama because it's vital to the economy but don't need anything to help the big 3. And 700 billion in financial services bailout money (that would help Toyota's customers get loans for cars) isn't onerous enough to filibuster, but $15 billion for the big 3 is. Maybe someone should start monitoring the communication between Mr. Shelby and Toyota - a foreign company that is trying to influence US politics in such a damaging way is, at least, unseemly. And possibly illegal.
Pit Row
He wanted to make make sure that if the Big 3 got taxpayers dollars, the Big 3 would protect American Jobs, over foreign ones. Not one of of the Big three reps said they could guarantee that. In fact they seemed to be squirming in the chairs at that question, like they were thinking just the opposite, close the US plants first and keep the foreign ones open.
You really need to get out of that 1970's mindset of American vs. Japaneses auto companies. I was born and raised in Dearborn, MI where that mindset, (brain washing) was burned into everyone in the area. When I started to buy American cars and realized some of my purchases were made in Canada, Mexico, or my Dodge pickup which was made in Japan, I woke up. Then I noticed over the years that a number of the Japanese cars are being made right here in the USA by American workers. So stop bashing on the Japanese when many of their cars that are sold here, are built here by American workers earning a paycheck and paying taxes. The lines drawn in the 70's are now totally blurred. Just because you buy a Ford, GM, or Chrysler, does not mean you are buying an American car, made by American workers, pumping money into the US economy. You could just as easily be supporting Mexico, or Canada or some other country instead when you so called buy American.
Chapter 11 for the Big 3 is the best thing that could happen to them. Those Senators are doing the right thing. I hope they don't buckle under pressure and cave at the next go around.
As far as guarantees which plants may close, the plants are tooled to build certain cars. Plants that are tooled to build cars that don't sell are going to be shut down first, regardless where they are. We can't criticize the big 3 for bad business practices and then turn around and tell them to guarantee us they'll institute more bad business practices.
At the end of the day, these guys weren't asking for a bailout, they were asking for a loan. I'm absolutely certain those companies are willing to undergo restructuring, but you can't look at companies that are the size and complexity of the big 3 and set boundaries for restructuring in a Senate hearing, particularly when the TV cameras are on and Senators are more interested in political posturing than they are in problem solving.
It's just a thought, ya know?
maybe companies should inform their employees of who to contact to set up a retirement/portfolio account???
this way, they get back what they put in and no matter who they work for, they're always safe. well, not safe, but in control of their own retirement destiny.
I think it would make more sense for these companies to get rid of managing peoples money and let them set up they're own accounts. if they [the employer] want's to pay some % into the account of choice, so be it.
this solution, would eliminate a lot of the current problems.
as it stands right now, companies offering pensions have to pay a certain amount, not matter what the market is/has done. that's a risk and that risk is costing everyone dearly.
corporations need to let the employees create they're own retirement accounts and assist them with a % matching to their account of choice.
THERE, PROBLEM SOLVED!!!!!!!
The problem is that there is a huge burden on hundreds of thousands of already-retired employees whose pensions are, by union contract, already set.
moving forward, something like I laid out would help them in the long run. that's if, they're interested in really making it.
unions are a modern version of the MOB.
The right step is for the government to provide bridge financing on the condition that they can appoint a car czar to restructure them, and if the UAW or the companies can't come to an agreement that the car czar feels will stabilize them, then the government cuts off any further funding and they're on their own. The car czar needs to insist on 401Ks for current employees, then he needs to look at the exising funding for the retirees, figure out what the ultimate shortfall is - probably another 10 billion or so - and sell the entire retirement program to a financial services company for future adminstration. It'll cost money, sure, but compared to the 750 billion that (I think) they've spent so far, it's nothing.
At the end of the day, it's insanity to push 750 billion dollars into the economy to avoid a depression and then stand by and let 3 companies fail that will drive you into a depression. If we were going there anyway, why didn't we keep the 750B for social services and recovery? Now we spent that, it's gone, and we're going to let it all fall anyway. It takes a bunch of Republicans to come up with lunacy like that.
Post a reply to: What a bunch of arrogant fools!