Bobko
19 Mar 2023 #1411
hope the workers refused.
Many did, but a big portion accepted offer.
An excerpt from an article published at the time:
GM informed 118,000 of its white-collar retirees of upcoming changes to its pension program on June 1. At the crux of the change is the decision by No. 1 U.S. automaker to get out of the pension business by no longer administering the program that puts a check in a retiree's bank account each month.
Of those 118,000, about 42,000 who retired between 1997 and 2011 will be offered the choice of a lump sum buyout or of continuing their pension as an annuity through the Prudential Insurance Company of America, a unit of Prudential Financial Inc. An annuity is a fixed sum of money paid to someone each year.
Those paragraphs set up the premise. Here's a reaction from a Polish American former employee of GM:
For Richard Fusinski, the buyout is not so much an offer as an insult.
"There was a time I was going to leave General Motors, but they told me what a big mistake that would be because of the great retirement that I'd have," said Fusinski, who was a senior engineering technician at the company's Warren, Michigan, technical center when he retired in 2003 after 29 years. "Now they're trying to screw that up."
Fusinski has done the math. He would need what he sees as an unattainable 7-8 percent return on his six-figure, lump-sum offer to earn him the same monthly amount he receives now from his pension. He also chafes at the assumption that he will not live past 75.
So... no one is happy. That's when you know it was a good decision :)
To me, it's ridiculous that a company that struggles to make cars profitably, was administering $129 billion in pension obligations circa 2012. It's the main reason GM was toxic to most investors. It was a pension fund masquerading as an automobile manufacturer.
