Topic: CAW 'furious' at Ontario over pensions

[Thinking Out Loud]

WAITER!  Reality check for table 7 with the CAW.......

http://www.wheels.ca/reviews/article/530788

[initial_D]

Of course, it is the fault of the government.

More action should be taken out on the gov't, just a mere Press Conference won't do. For starter, blockade the Ontario Government Building, and demand the resignation of the premier.

[Oz]

From some of the comments on the article:

Why should taxpayers subsidize the the outrageous pension amounts of the CAW. If GM or Chrysler go broke should the whole Canadian economy follow suit? I paid my Pension fund out of my wages, not as an addition to it. The autoworkers, most of them un- or semiskilled should learn to live within their means. And that goes for Lewenza as well.

[/i]

I agree with the poster's sentiments. If they didnt put their inflated salaries into RRSPs like the rest of us, agreed to those pension contracts signed by CAW... no way in heck I'm bailing them with my tax dollar.

[tpl]

From some of the comments on the article:

Why should taxpayers subsidize the the outrageous pension amounts of the CAW. If GM or Chrysler go broke should the whole Canadian economy follow suit? I paid my Pension fund out of my wages, not as an addition to it. The autoworkers, most of them un- or semiskilled should learn to live within their means. And that goes for Lewenza as well.

[/i]

I agree with the poster's sentiments. If they didn't put their inflated salaries into RRSPs like the rest of us, agreed to those pension contracts signed by CAW... no way in heck I'm bailing them with my tax dollar.

Is it not true that with a fat company  pension plan that you CAN"T put your money into an RRSP.   I suspect that a CAW member has no choice but to join the company pension plan.   A condition of employment agreed to by the Union.

[TopGun]

I agree with the poster's sentiments.  If they didnt put their inflated salaries into RRSPs like the rest of us, agreed to those pension contracts signed by CAW... no way in heck I'm bailing them with my tax dollar.

This is a perfect example of the unreasonable stuff that's on this forum.

Oz...buddy...I don't disagree that the state of GM has MUCH to do with GM's mis-management...OK?

That said, the poster's sentiments are 100% incorrect.  The skill level or the worker?  Irrelevant.  Their inflated salareis? Irrelevant.  What they did with their money?  Irrelevant.

The only relevant things are:

(1) GM was allowed, by the government, to take a holiday from the payments, and they did.

(2) Those pensions were negotiated as part of a legal agreement.

If you're boss came to you and said...well Oz...I know we signed you on for $100,000 a year...but I'm clawing back 50% of it.  Would you be seen as "living beyond your means"?

[Oz]

If you're boss came to you and said...well Oz...I know we signed you on for $100,000 a year...but I'm clawing back 50% of it.  Would you be seen as "living beyond your means"?

If I was stapling paper all day for 100K a year I'd know I'd be overpaid for sure. Plus you're forgetting that the union negotiated those contracts and there must have been someone in there that should have known GM wasn't making payments.

But TPL's comment I agree with to an extent, your tax sheltered RRSP only has so much room - having a lavish pension plan fills it up a bit. But it doesnt prevent one from saving though.

[TopGun]

If you're boss came to you and said...well Oz...I know we signed you on for $100,000 a year...but I'm clawing back 50% of it.  Would you be seen as "living beyond your means"?

If I was stapling paper all day for 100K a year I'd know I'd be overpaid for sure. Plus you're forgetting that the union negotiated those contracts and there must have been someone in there that should have known GM wasn't making payments.

Aha...classic Step 5...If post contains one item that may be opinion or is questionable – expose it for what it’s worth....and do not mention all of the other factual information.

What the union knew or didn't know about the payments is irrelevant....and out of their control.

So...I'm right then?  C'mon dude!!

[mwqa]

I just don't understand how sensible union members can act as if the sky is NOT falling. 

It is not business as usual. At my company, we provide software to retail chains, in Canada and in the US. Out of nowhere, in the last 6 months we've had 2 layoffs, reducing our staff by 20%. We are not likely to have raises this year, and personally I would be willing to take wage cuts and reduced hours and whatever else it takes to keep my company healthy and consequently preserve my livelihood.

Certainly if I knew my company was on the edge of bankruptcy, I do whatever I could to keep it going, although I wouldn't go on EI and work for free, as a bunch of people at one of my previous employers did.

It doesn't seem to be that way with the CAW or their membership. I see lots of anger with people saying management is out to get them, and a refusal to make concessions because management is asking for them to 'sacrifice' too much. Well, with an attitude like that… 

As for the pensions, they were not fully funded. It looks like the payer will not have enough money to fund them, charitably because of circumstances beyond its control (everyone including the CAW says it’s due to the bad economy). Consequently, the pensions won't be funded. Oh, well, sh!t happens. That's life.

You want to change that, you better sober up and realize there are real problems that only you can fix.

[PJungnitsch]

As mentioned back in March this could go a lot deeper than GM Canada workers losing their pensions, it could mean the liquidation of the entire Canadian operation if GM adopts the good company/bad company bankruptcy plan:

GM would load up the bad company with Hummer, Saturn, and any factories or operations that it needs to ditch. Unless GM found a buyer, it would ditch those assets in bankruptcy court, where they would be liquidated. Dealers would have a tough time suing to be made whole while Hummer and Saturn are in Chapter 11. GM could even put its Canadian operations into bankruptcy. GM does good business there, but its pension plan is seriously underfunded.

http://www.businessweek.com/magazine/content/09_14/b4125072696638.htm?chan=top+news_top+news+index+-+temp_news+%2B+analysis

[Oz]

If you're boss came to you and said...well Oz...I know we signed you on for $100,000 a year...but I'm clawing back 50% of it.  Would you be seen as "living beyond your means"?

If I was stapling paper all day for 100K a year I'd know I'd be overpaid for sure. Plus you're forgetting that the union negotiated those contracts and there must have been someone in there that should have known GM wasn't making payments.

Aha...classic Step 5...If post contains one item that may be opinion or is questionable – expose it for what it’s worth....and do not mention all of the other factual information.

What the union knew or didn't know about the payments is irrelevant....and out of their control.

So...I'm right then?  C'mon dude!!

Step 5?  
Rough day at work?  

They contributed nothing for those pensions, didnt pay attention to the fact that their mismanaged company wasnt paying 'insurance' for backing the pensions. Now they want $2B from us because the people watching their contracts were snoring?

So GM screwed up, the government missed the boat. Yeah it sucks - but there are thousands of other people losing jobs and are in a much worse situation. CAW employees have had a good run with their packages, but the chocolate sauce slide ends here.

[blur911]

If you're boss came to you and said...well Oz...I know we signed you on for $100,000 a year...but I'm clawing back 50% of it.  Would you be seen as "living beyond your means"?

If I was stapling paper all day for 100K a year I'd know I'd be overpaid for sure. Plus you're forgetting that the union negotiated those contracts and there must have been someone in there that should have known GM wasn't making payments.

Aha...classic Step 5...If post contains one item that may be opinion or is questionable – expose it for what it’s worth....and do not mention all of the other factual information.

What the union knew or didn't know about the payments is irrelevant....and out of their control.

So...I'm right then?  C'mon dude!!

Step 5?  
Rough day at work?  

They contributed nothing for those pensions, didnt pay attention to the fact that their mismanaged company wasnt paying 'insurance' for backing the pensions. Now they want $2B from us because the people watching their contracts were snoring?

So GM screwed up, the government missed the boat. Yeah it sucks - but there are thousands of other people losing jobs and are in a much worse situation. CAW employees have had a good run with their packages, but the chocolate sauce slide ends here.

Yep, if only all those retirees had time machines to go back 30 years and divert more money into RRSP's instead of pensions. They should have known the next generation would all be buying Toyotas.
 Those greedy bast*rds, they should just get back to work, 78 isn't that old.

[tpl]

The governments, Federal and Provincial at at fault here by not insisting ( and passing a law) that ALL companies that choose to offer pension plans must fund them as an expense second only to paying taxes.  No holidays no special rules for some industries  just a simple law. 
  Another law that exists in some countries ( I believe it exists in the UK now) should be that ALL pension plans are transferable when a worker changes jobs.  I.e you work for GM for 20 years and move to some other employer with a pension plan  and your pension entitlement goes with you. GM would have to hand over the actuarially correct amount of money to the pension fund management at the new employer.  This last one sady required Feds and all the provinces to agree and they never have managed to so do... on the occasions when they have discussed it.

A third way, the French, Italian and Belgian  way I think is that the state provides a pension of maybe upto 75% of your working income and taxes all employers to pay for it.   Dangerous in times when companies go out of business but great for the workers.


I think that given the way things ARE not as they could be that Lewenza is quite right to get mightily oissed off at someone or other.

[ovr50]

I'm pretty much in accord with tpl's post above - something is wrong when a long service employee can lose their pensions because the company did not fund properly. The company should be forced to fund.

As far as bringing private RRSPs into the discussion, I think that misses the point. These workers were promised something that now appears to be in danger. And being pension plan members, their RRSP contributions would have been severely impaired.

Not an expert, but something is amiss here. 

[mmret]

IMHO just make everything into defined contribution.

The accounting rules for DB plans is what lets you get underfunded in the first place, then people get angry. And in the end what usually happens is that the young pay more into the fund, the old get higher benefits, etc etc. which they did not "pay" for.

Its a ponzi scheme really.

[TopGun]

.....
These workers were promised something that now appears to be in danger
......
Not an expert, but something is amiss here. 

Nope...not this time anyway Ovr.   

[articsteve]

IMHO just make everything into defined contribution.

The accounting rules for DB plans is what lets you get underfunded in the first place, then people get angry. And in the end what usually happens is that the young pay more into the fund, the old get higher benefits, etc etc. which they did not "pay" for.

Its a ponzi scheme really.

 

The CAW, GM, and both levels of government knew that the liabilities existed and would grow worse.  However, keeping the plants running was the main priority so it was all swept under the carpet.

IMO, those workers are SOL.  The vast majority of voters don't have pensions and don't give a da*m about auto assembly retirees.  Former Stelco workers lost their pensions and had to settle for the $1000. a month maximum and that could dry up or maybe it has. 

[toolatecrew]

The Government did not FORCE GM to underfund their pensions. They gave them the option to do it. GM as a company effed it up royally. The gambled with the funds that should have gone into the pensions to do "something" else (keep the company running?).

The fact that GM did the wrong thing is not the fault of the Canadian Government. There is no law that FORCES my employer to offer me a pension. If I don't invest for my reitirment I'm on my own. If when I go to retire can I go to the Government and say "You didn't pass a law that ofrced my employer to give me a pension..hey Government you didn't FORCE ME to save x% for retirement you have to bail me out?" Of course not.

The blame needs to go squarley where it should..on GM. They could have taken some of that money from when times were good and funded the pensions for when times were bad. They chose not to. Bad decsion. GM had an obligation to provide for the pensioners. GM not the Canadian puiblic GM. They didn't do it through their own choice.

To repeat the law did not prevent GM from properly funing the pension. They could have done it. They chose not to. Just another bad business decsion why should the government be responsible for paying for GMs bad business decsions?

[tpl]

The Government did not FORCE GM to underfund their pensions. They gave them the option to do it. GM as a company effed it up royally. The gambled with the funds that should have gone into the pensions to do "something" else (keep the company running?).

The fact that GM did the wrong thing is not the fault of the Canadian Government. There is no law that FORCES my employer to offer me a pension. If I don't invest for my retirement I'm on my own. If when I go to retire can I go to the Government and say "You didn't pass a law that forced my employer to give me a pension..hey Government you didn't FORCE ME to save x% for retirement you have to bail me out?" Of course not.

The blame needs to go squarely where it should..on GM. They could have taken some of that money from when times were good and funded the pensions for when times were bad. They chose not to. Bad decision. GM had an obligation to provide for the pensioners. GM not the Canadian puiblic GM. They didn't do it through their own choice.

To repeat the law did not prevent GM from properly funding the pension. They could have done it. They chose not to. Just another bad business decision why should the government be responsible for paying for GMs bad business decisions?

My point TLC was that the government could and imho should have said to companies. " You do not HAVE to offer any pension scheme BUT IF you DO then here are the rules"    Easy rules too.   All pension monies paid to a fund in trust held by a trust company... just like RRSPs.  All monies paid up to date according to the actuaries requirements  every year. No under funding. Any overfunding because of luck and good judgement in the investments is the property of the pension trust.
The companies would have screamed.    Too bad... they'd always have the option to not offer a pension at all.

I agree that it is GMs fault. I just say that a responsible government would never have allowed GM the option.  As mmret said above... its the accounting rules are wrong.

[99 Silver]

The blame needs to go squarley where it should..on GM. They could have taken some of that money from when times were good and funded the pensions for when times were bad. They chose not to. Bad decsion. GM had an obligation to provide for the pensioners. GM not the Canadian puiblic GM. They didn't do it through their own choice.

To repeat the law did not prevent GM from properly funing the pension. They could have done it. They chose not to. Just another bad business decsion why should the government be responsible for paying for GMs bad business decsions?

I agree with you.

I was a director of a Public Corporation in Canada in my working days and we were very careful with the pension funding issue.  What we did was to over contribute (knowingly) in good years because the contribution was tax deductible so we could under contribute in poor years.  In fact we had to cut back on contributions in some years because Revcan was upset because of the tax savings.  I must admit that the company was almost always profitable - not like the auto industry.

It's been five years since I retired and current management could not stomach the volatility in the pension funding requirements and moved to defined benefit pensions to make pension funding predictable.

The problem with the auto industry was that they were in essence slowly drowning and they tried everything to try and stay afloat as long as they could.  What finally broke them was that they most of their R&D and product investments in large SUV's and trucks because that was where they were able to make the biggest profits.  Then the oil price explosion occurred followed by a severe recession with a 40% reduction in sales volumes and the party is basically over.

I don't think there are many business models that could survive that - especially one with long lead times (3 years +/-) and multi billion dollar investments for new product.  Hell - even Toyota is struggling and they have been making huge profits the last few years and have a product mix that is more tuned into todays market.

There is no doubt in my mind that Chrysler is finished and that GM will be a mere shadow of it's former self if it indeed can survive in any form.

The real tragedy is what will be happening to all the workers involved, because they are not well suited for other high paying jobs and they will have to make a difficult lifestyle adjustment.

The companies have appeased the unions for far to long and now it is coming to a sad conclusion.

[barrie1]

The workers have a legal right to have the pensions they worked for and the Canadian Gov is responsible for protecting it which they did not at all. What about Royal trust who actually sends out the money to the pensioners, another financial institution which is legally bound to report such things. Did they I wonder as the Gov would have known for years but did 000 to try to stop it at all. Whether they loan any Gov money or not for either or both we the taxpayers are the ones who pay for it so theres no sence getting all twisted into a knot as your paying and thats all there is to it. These funds should have been issued thru the FDB anyways as thats another law thats still on the books.