Save GM with bold trade stroke
- Thread starter WoodPeckr
- Start date
Labour is what workers contribute to any enterprise, I am astounded that this has escaped you. Can you possibly suggesting GM would contibute to pensions of people who'd never worked there? 'Cause everyone who did, "contribute[d] to their own future financial security, in one form or another" through labour.JohnLarue said:
The existing plan: Worker labours, gets paid say $25, employer pays another $5 into pension fund. Cost to employer $30, worker nets $25
Your plan: Worker labours, gets paid $30, worker pays $5 into pension fund. Cost to employer $30, worker nets $25.
See workers contribute labour, all money comes from employer Everyone "contribute
So 'splain please how your plan would have kept the fund from going bust. You might also ponder what would make your plan preferrable to either management or union. There's gotta be a reason why both agreed to the existing over yours.
Just for Johnny: You've sneered before when I failed to respond to your every point, even ones I found unexceptionable, and i would like to oblige your hunger for my responses. But you so tightly hung them on what you quoted from me, that when I Quote them—and my stuff disappears in th process—they become somewhat incoherent, and reflect no credit on your views. Having to state your side and mine on your whole shotgun spread is onerous, and a bit at a time will have to do. It's the price of inter-quoting.
Best way for GM to come out of this is selling cars.
All automakers need to quit trying to score on every sale and work the percentages. If you make 5k on one car cut that to 500 and sell ten in the time it takes to sell one.
All automakers need to quit trying to score on every sale and work the percentages. If you make 5k on one car cut that to 500 and sell ten in the time it takes to sell one.
This is a total mystery.oldjones said:
Perhaps his business school didn't teach that 'BASIC' !.....
The point is that the cost to employer is more than double $30.oldjones said:
It's not like they were underpaid in lieu of the pension.
They were often overpaid and all the extras just made it extra ridiculous.
They need to live within their means and become viable no matter what it takes.
If wages and pensions need to be cut in half, so be it.
oldjones said:
Once again you missed the point
I will type slow to help you understand
Labor is a contribution all employees make in exchange for pay
Your view is that this contribution should also entitle employees to future financial security with zero monetary contribution from the employee
Given the extra-ordinary high wage rate for unskilled, nontransferable labor, this is an unrealistic expectation
i.e. Their wages more than compensate them for the labor they provide.
A monetary contribution by the employee to the plan is not only reasonable it would have been very prudent for the employees
In the real world, most employees contribute to a plan, often to buy shares in the company (that would have been a poor choice in this case) or into a group plan, that invests the money elsewhere
http://dealbook.blogs.nytimes.com/2009/04/24/gm-employee-plans-flee-automakers-stock/
Progressive companies will match the employees contribution to some degree 20, 50, maybe even 100% match
Had the CAW / UAW contributed say 2-5 % of their take home pay, the plan might be in much better shape to provide them with some security, in the event that their company ran into trouble.
And guess what, the company has run into trouble.
The point being every individual must take responsibility for their own financial future.
Your default position is
1. The company must pay for everything (wrong)
2. The government will have to clean up the mess the company gets into trouble (wrong- This is outrageously wrong)
3. There is absolutely no onus on the employee to kick in at any time for his / her future (wrong- not in the real world)
As for the other Bah, Bah, Bah in your quote directed to me specifically
????? English please
Ah, so now that you understand the numbers, you want to shift back to the 'total labour costs' stalking horse. Post your list of included costs then.Malibook said:
All you're saying here is that you personally think autoworkers were overpaid. Bully for you, GM's incompetent managers didn't think so, they signed the contracts, and made promises they couldn't keep.
They don't deserve another day's employment. But like your opinion of what's too much pay for assembly workers, that's not relevant to what we, as a society, do about the helpless, or about people who welch on their contracts.
That is relevant because the GM incompetents have come begging to us to solve their self-made disaster. And so far, the proposals see them keeping their jobs and paycheques, and the powerless pensioners getting stiffed.
For what social good, pray tell?
Absolute falsehoodJohnLarue said:
This is crap. Makes no difference if the pension contribution passes through workers hands first. The only way costs come down is if the company pays out less. Cuts wages, or cuts pension contributions. GM's negociators clearly weren't capable of getting any such deal. In fact they saw advantages to their side, as they controlled the fund itself, and could forgo the payments from time to time. As they did.
One scenario doesn't make the rule. We've already disposed of the fairytale that it makes a difference whether the company pays direct or gives it to the worker to pay. Neither keeps the company solvent.
Let's imagine now, that you have the workers interests at heart. Taking money from their pay and investing for their retirement would be a good and wise for auto workers to do. Guess what, many did. But as memebers of a defined benefit paension plan they could not invest as much as you or I in their RRSPs. And they've suffered losses along with us.
I have no idea whether they had optional checkoffs that might have reduced their take-home to enrich their pensions, but that's not an unknown arrangement. Because we—our government—is proposing to structure carmakers' bankruptcies and bailouts to allow carmakers to escape their contractual pension obligations, who knows what might become of those.
Total fiction. If you're going to completely make up my 'default position' why do you bother wasting bandwidth by supposedly replying to it?
To parellel your points, here's the what I actually think:
1. In an employer-employee relationship the employer pays, the employee labours, the exchange of money for labour is a contract. Sometimes verbal and hard to enforce, sometimes lawyered up the ying-yang. Always a contract to exchange work for money.
2. Government always cleans up the mess; it's what they do, from trash collection, through crop failures, bankrupt toxic waste plants, car crashes, outright crookery and unforseeable disasters. Whether by direct government action: the army building dikes, or indirect: the police forcing you to fight forest fires, or making deadbeats sell their assets and pay those they owe. If not government who? Goodwill?
3. Everyone looks out for their future as best they can. Taking a job with a pension is one common way of looking after your future. And many of those pensioners, whose taxes are bailing out GM along woith yours, had the same sort of RRSPs you do. The feds will force you one day to buy a RRIF with your RRSP. That's a contract you make with someone who promises they'll pay you a certain amount every month. Just like the carmakers promised the autoworkers in exchange for their labour. I hope, for your sake, the government makes them honour it, and checks and weeds out the Madoffs, better than they've overseen the GMs.
Perhaps you meant your weird last line as a response to me letting you know that I wasn't ignoring anything you said just because I could only reply to one issue at the time. You had earlier taken me to task, for leaving a single one of your thoughts unaddressed. Sorry if you weren't able to see the intent. Sorrier that I tried. Won't again.
Let me return service: Here's your "default postion':
1). No one should do better than me, not in pay, not in benefits, not in retirement. By extension, nobody should do better than everyone who's like me. Especially, if I can call them unskilled.
2). Union's are bad, they've never done anything for me, except make things more expensive because their members get more pay and better deals than I can, and that's bad—See 1) above. Especially, if I can call them unskilled.
3). Fairness, logic, consistency, helping the disadvantaged or the weak, none of these can ever stand if they aid a union cause. Especially, if I can call them unskilled.
4). No matter what might be sacred about any other contract, or undertaking, if it was a union contract, it can be adjusted and rearranged to suit the company, and the government should make it clear they won't stop the process. Especially, if I can call them unskilled.
Your RRSP guy is still raking off the same percentage in tough times, when you're losing, as in flush when he made you money, have you renegociated your contract with him? Told him you just won't pay. Tried, 'can't pay, but wanna keep the house' on your mortgage lender? Like GM did? How'd it go?
Never mind.
Companies are supposed to be allowed to fail.oldjones said:
This is a fundamental part of capitalism and free markets.
The competent take over from the incompetent and life goes on.
Of course this is a painful process but throwing good money after bad will make matters much worse for much longer and is way worse for society.
Why should our kids and grandkids be burdened by our foolish bailouts unless there is a reasonable expectation of sustainable viability?
Plight of Carmakers Could Upset All Pension Plans
The government estimated that Chrysler's plan was $9.3 billion short as of last November -- but said it would be responsible for only about $2 billion of that. Most of the shortfall would be sliced from workers' benefits. At G.M., the estimated shortfall was $20 billion as of last November, but the government would assume $4 billion of obligations and G.M.'s workers would lose the rest.http://finance.yahoo.com/focus-reti...All-Pension-Plans?mod=fidelity-buildingwealth
Since we seem to be following the US model, perhaps we may cover 20%, although there is no legal obligation to do so here.
Of course companies fail, and pain and damage is the result.
As in any disaster the wounded look for help—which is why car execs came knocking at Queens Park. So did the unions. They all want our help to keep on as best they can, as painlessly as possible, government dough, mediators, pension contribution forgiveness, whatever it takes. They want to go on making cars, they hope they can sell. They can heal, the pain may be wotrth it.
Maybe it'll work. Maybe it won't.
Unlike them, the pensioners aren't still working, there's no keeping on for them. Unlike the autoworkers, they can't agree to take less wages or benefits for their work, nor can they 'find a better job'. And unlike you ( I suspect) or I, their RRSP contributions were limited, by law, because they would be getting their pension. They have no way now to make that up. And there's as much of their taxmoney going into the bailout as there is of yours or mine.
Their pensions are like the annuity the feds will one day make you buy with your RRSP. A contract for a monthly pay out. And by jimminey I'll bet you'll want that contract enforced by the government, right down to the welcher's back teeth and first-born.
Retirees pensions are part of a deal they made with the carmakers, who will not go down the tubes w/o assets. In fact bankruptcy restructuring/Chapter 11 avoids the tubes altogether. The government plays business-police; it mandates part payments instead of full, ranks creditors preferentially, and strongarms acceptance to enable the overstretched company to survive on its inadequate income.
If they do that for the banks, tire companies, and other suppliers why not for the retirees? And why not base that ranking on the creditors ability to tap other income, so those who might 'go under'—like, a small supplier, or the retirees—get considered ahead of, say Goodyear, or Magna who have other resources?
We can ignore the moral responsibility (and incompetence) of government in running a Pension Guarantee Fund that doesn't guarantee, and selling increased contributions to it by carmakers as ensuring the same pension safety as actually funding the pensions. No one's hands are clean in that mess, but it amounted to the companies welching, the government facilitating it, and the union having no way to fight it. But to leave the one party that actually did right all along, to suffer most when they have the fewest resources of any is as despicable an act as I can imagine and discredits any who aid and abet it.
It doesn't have to be that way. Queen's Park and Ottawa just have to require that any restructuring put the pensioners first. Line up for second place.
Oh, and it might help if the executive floor guys were looking at no pensions better than the retirees until they made it work.
As in any disaster the wounded look for help—which is why car execs came knocking at Queens Park. So did the unions. They all want our help to keep on as best they can, as painlessly as possible, government dough, mediators, pension contribution forgiveness, whatever it takes. They want to go on making cars, they hope they can sell. They can heal, the pain may be wotrth it.
Maybe it'll work. Maybe it won't.
Unlike them, the pensioners aren't still working, there's no keeping on for them. Unlike the autoworkers, they can't agree to take less wages or benefits for their work, nor can they 'find a better job'. And unlike you ( I suspect) or I, their RRSP contributions were limited, by law, because they would be getting their pension. They have no way now to make that up. And there's as much of their taxmoney going into the bailout as there is of yours or mine.
Their pensions are like the annuity the feds will one day make you buy with your RRSP. A contract for a monthly pay out. And by jimminey I'll bet you'll want that contract enforced by the government, right down to the welcher's back teeth and first-born.
Retirees pensions are part of a deal they made with the carmakers, who will not go down the tubes w/o assets. In fact bankruptcy restructuring/Chapter 11 avoids the tubes altogether. The government plays business-police; it mandates part payments instead of full, ranks creditors preferentially, and strongarms acceptance to enable the overstretched company to survive on its inadequate income.
If they do that for the banks, tire companies, and other suppliers why not for the retirees? And why not base that ranking on the creditors ability to tap other income, so those who might 'go under'—like, a small supplier, or the retirees—get considered ahead of, say Goodyear, or Magna who have other resources?
We can ignore the moral responsibility (and incompetence) of government in running a Pension Guarantee Fund that doesn't guarantee, and selling increased contributions to it by carmakers as ensuring the same pension safety as actually funding the pensions. No one's hands are clean in that mess, but it amounted to the companies welching, the government facilitating it, and the union having no way to fight it. But to leave the one party that actually did right all along, to suffer most when they have the fewest resources of any is as despicable an act as I can imagine and discredits any who aid and abet it.
It doesn't have to be that way. Queen's Park and Ottawa just have to require that any restructuring put the pensioners first. Line up for second place.
Oh, and it might help if the executive floor guys were looking at no pensions better than the retirees until they made it work.
People collecting a pension from a company that has failed need to face reality.
The pension guarantee fund is not an endless fund with infinite cash.
GM is not a welsher.
That would suggest that GM has the money and just doesn't want to hand it over.
Regardless of RRSP space, pensioners were just as free as anybody to save and invest for themselves.
If they put all of their eggs and faith into the eternal success of GM, that was a bad decision.
If GM is to be liquidated, the pensioners can put in a claim along with other creditors.
It doesn't mean that they will receive 100% of their benefits for rest of their projected life expectancy.
In the US it would seem that they are looking at around 20% of the current liability and I would expect that Canada would do something similar.
The pension guarantee fund is not an endless fund with infinite cash.
GM is not a welsher.
That would suggest that GM has the money and just doesn't want to hand it over.
Regardless of RRSP space, pensioners were just as free as anybody to save and invest for themselves.
If they put all of their eggs and faith into the eternal success of GM, that was a bad decision.
If GM is to be liquidated, the pensioners can put in a claim along with other creditors.
It doesn't mean that they will receive 100% of their benefits for rest of their projected life expectancy.
In the US it would seem that they are looking at around 20% of the current liability and I would expect that Canada would do something similar.
Malibook said:
I have mixed emotions on that one but reality is a defined benefit plan should have been established in the 80's.
Coulda, woulda, shoulda.papasmerf said:
Unless they were run by extremely rare and talented money managers, they would still be in big trouble now regardless.
Problem is contracts made in the golden age of the BIG 3 were never properly revisited.Malibook said:
We Interupt this Pitched Battle to bring You the Following
Did you guys see this yet?
Statement from GM Bondholder Committee’s Advisers
It might have a bearing on the discussion.
Did you guys see this yet?
Statement from GM Bondholder Committee’s Advisers
It might have a bearing on the discussion.
This is where you are absolutely wrongoldjones said:
You are taking about government intervention for natural disasters & issues where public health and safety are concerned.
There is no national disaster if this special interest group does not collect its pension (defined benefit at that- not too many tax-payers have defined benefits plans- mostly defined contribution).
A shame and hardship for many Yes, but no national disaster
Anyone with even a rudimentary understanding of economics and finance knows the government can not be the lender of last resorts for all commercial contracts without exception
They have to be able to pick and choose.
Why?
1. There is not enough in the govt treasuries to do that without economic upheaval unparalleled in history. I believe we will be paying for the bank mess for decades, and I am unsure it was the right way to do so, but the financial system had to be saved. GM does not have to be saved
2. There is an agency issue
Two parties can knowingly sign a contract which will lead to certain failure, but both agree because they know the govt will clean up the mess with taxpayers money
This can not be allowed
We owe it to future generations not to saddle the govt with excessive debt so that a select group gets its gold plated pension, afr in excess of what the average tax-payer gets
If you honestly think it is the govt's responsibility to clean up everyones commercial mess, you will surely be disappointed and many times over
As one bystander, you guys are having a debate that is about as good as it gets on TERB. Lot's of content, not too many insults to cloud the talk. Lots of thought put into each side. Applause.
