This is an article from the St. Louis Post Dispatch and some of us thought it outragous. Below is the article and a couple replies from folks.
It is sad in a union town like St. Louis that its major newspaper is a spokesperson for the GOP.
http://www.stltoday.com/stltoday/news/stories.nsf/editorialcommentary/story/FB9B0E99CEEAECE18625750700685EE1?OpenDocument
Protecting pensions is good for G.M. and the country
11/20/2008
Once, what was good for General Motors was good for the United States. This week, the chief executive of General Motors — along with his counterparts at Ford and Chrysler — tried to convince Congress that the saying still holds true. Their pleas for a financial bailout seemed as difficult of a sale as their large-size, low-mileage vehicles. Members of Congress and others pilloried automakers for their failure to innovate and the inability to respond to changing market conditions quickly enough. Automotive executives certainly are guilty of many failures. But one issue cited by critics deserves closer examination. It is the charge that a contributing factor to American automakers' financial distress is excessively generous pension benefits for retirees.Writer Malcolm Gladwell has pointed out in The New Yorker that retirement, health care, disability and unemployment benefits provided to U.S. autoworkers actually are about average for the industrialized nations.
The real issue for U.S. automakers — and steel makers and aircraft manufacturers and other industries — isn't that benefits are too generous. It's that there are too many retired people getting them, compared with the number of working men and women left at the companies that provide them.For all of Detroit's mistakes and misjudgments, its pension problem is mostly a function of excessive success. America's automakers have prospered for so many decades that now there are hundreds of thousands of retired autoworkers. But thanks to steady improvements in production efficiency, the industry has far fewer workers now than it did in early 1960s.When American car companies and the unions representing their workers agreed in 1950 to create retirement pensions for employees, some of the people eligible to receive the new benefit were workers on the brink of retirement. Because the pension system had just been devised, they had paid nothing into it. When these long-time workers retired soon after, it put the companies instantly in the hole in funding their pension obligations.Each time pensions were renegotiated in a new contract, the hole got deeper. The hope — based on actuarial tables of life expectancy — was that companies would catch up in time and that retirement plans eventually would have the funds they needed to fulfill the promises made to workers. Until then, the difference would have to come from profits earned by those who still were working.In 1962, G.M employed 460,000 American workers, and it was providing retirement benefits to about 40,000 former employees. By 2005, G.M. had about 140,000 employees in this country, but it was paying benefits to 450,000 retirees. Those numbers simply cannot be sustained.Almost six decades ago, management theorist Peter Drucker wrote that pension benefits offered by individual companies amount to long-term bets on the financial security of each single business. "Is there any one company or any industry whose future can be predicted with certainty for even 10 years ahead?" he asked.As former workers at G.M., Bethlehem Steel, American Airlines and numerous others can attest, the answer is no.In most other developed countries, governments provide pension benefits directly to retired workers, using money collected from private businesses. So instead of betting their future security on the fate of one company or even one industry, workers are betting on their own country's economies as a whole. The approach creates the largest possible pool and, therefore, the smallest possible risk. In the long term, that's a more sensible solution to the pension crisis that's still roiling American corporations.Companies shouldn't be penalized because they've been successful enough to stay in business for a long time. A national pension system would allow them to remain competitive. It also would protect the interests of the retired workers whose skill and dedication helped make that success a reality.
(4) Comments
nyc-stl November 20, 2008 1:49PM CST
Our country cannot afford for rank and file workers to retire at 55 years of age be on a pension for 20 or 30 years; whether a pension fund or the government is holding the money is irrelevant.And before we commit yet more retirement dollars to government "stewardship" (spent and replaced with IOUs), let's pause for a moment and think about the social security trust fund.Workers should draw a valuable lesson from the collapse of these defined benefit plans. The unions took promises in lieu of cold hard cash in their paychecks. Next time fight for the cash.
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gary roller November 21, 2008 11:06AM CST
I am one of those "retired workers" refered to in the article and the response by Ny-Stl.
I made a decision many decades ago based on the "word" of a major container company, the union and believe it or not, the government.I was a senior at a major university at the time and had job skills in a variety of industries.
I factored in the pay, benefits and the "word" on retirement benefits to make an informed decision to my "career". Series of "mergers, buy-outs and the rest" and early retirementGood deal or so I thought.I find out some moons later that the company had no intention of honoring agreement and that the union was not able of defending contract based on court decision of Bush political appointees.
Money? Partly, but it is my belief that those corporations and the government will most certainly honor agreements or there will be some political unhappiness of the first order.
As far as I am concerned, politicans whom side with companies not to honor agreements should be replaced. As long as corporations can pay tens of millions to top executives, they can afford pension/medical benefits.
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acret99 November 22, 2008 10:49AM CST
As a retired steelworker in the container industry, I am appalled by this article. I worked 40 years in various operation with the promise of benifits after retirement. In those years, a portion of our hourly wage was designated to fund our retirement. Not realizing the company had no intention of honoring their agreement at the time, we upheld our end and worked to make the company very profitable. It is only just that the company is required to uphold their agreements.The wasteful spending of manufacturing, excessive CEO salaries/perks, and the outsourcing of jobs to other countries have contributed to the demise of manufacturing in this country. Retirees spend their money on appliances, cars, and necessary needs, which help to support our economy.Note: Retirees have paid their dues and we shall demand justice from the government and the companies. R. Merkel, Pres. SOAR Chapter 11-3
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d.abernathy November 22, 2008 7:14PM CST
I retired after thirty four years. Retirees deserve what they were promised in retirement benefits. They have worked very hard for what they were guaranteed. People who say they get to much retirement benefits,should get a job on the line and under the same circumstances. Do you feel you could last the 90 day probation period? Then see if you feel the same way. We purchase homes, appliances, pay doctor bills. If the retirees didn't purchase these items, you would see a big negative change in the economy. Millions of dollars the CEO'S make, plus perks, should demand that a reasonable amount in parity with the working class like the foreign companies. I can say because of my experience with my fellow employees, during our working tenure we all have major health problems. We didn't have OSHA to stop the the problems in those days. Even now, OSHA does not have the ablility or will to correct workplace problems.D. Abernathy, UAW Local 325 Retiree Chairman
