More Good News from the Big Three

[Joanne98]

posted by John Pottow
More good news from the Midwest - GM has announced its plans to "reform" its retiree health benefits to help its financial crisis. (Here's an article from today in the Detroit Free Press.) What's the plan? Make the workers pay higher percentage of the health insurance premium? Well, sort of. How high -- 20%? 50%? Hmm, try 100%. Yup, they're canning health insurance altogether for retirees. (In fact, it's actually worse than 100%, because that would be 100% of a group-priced health insurance policy -- presumably now the retirees will scrounge for medigap insurance in the healthcare state of nature spot market.) As a bone, GM's going to increase the defined-benefit pension payment by up to $300/month. Sounds like yet another shuffle from defined-benefit to defined-contribution, writ large.

I'm not picking on GM. Economic life sucks here (although Google opened a facility in Ann Arbor -- so let's keep those hopes for the new Michigan economy alive). I'm just sharing the news...

http://www.creditslips.org/creditslips/2008/07/more-good-news.html

[Sadie4629]

1. Don't know what else they can do

They have a real crisis going on, and need to take _immediate_ steps to stop the bleeding.

I heard once what the GM benefits package costs the consumer who wants to buy their product. It is outrageous.

[DCKit]

2. How many policies would the CEO's bonus and golden parachute packages pay for?

The reported cost of pensions and healthcare for retirees is a distraction from the corporate benefit culture that's developed since St. Raygun planted the meme that "Greed is Good." Too bad it only applies to a certain class of people.

No matter how much these companies lose, upper management walks away smirking, gloating and rich.