[lit-ideas] WSJ: Workers' Pensions Wither, Those for Executives Flourish

  • From: "Franz Fuchs" <f.fuchs@xxxxxxx>
  • To: <lit-ideas@xxxxxxxxxxxxx>
  • Date: Mon, 26 Jun 2006 18:40:19 +0200

---
Hidden Burden

As Workers' Pensions Wither, Those for Executives Flourish
Companies Run Up Big IOUs, Mostly Obscured, to Grant Bosses a Lucrative
Benefit

The Billion-Dollar Liability

By ELLEN E. SCHULTZ and THEO FRANCIS
June 23, 2006; Page A1

To help explain its deep slump, General Motors Corp. often cites "legacy
costs," including pensions for its giant U.S. work force. In its latest
annual report, GM wrote: "Our extensive pension and [post- employment]
obligations to retirees are a competitive disadvantage for us." Early this
year, GM announced it was ending pensions for
42,000 workers.

But there's a twist to the auto maker's pension situation: The pension plans
for its rank-and-file U.S. workers are overstuffed with cash, containing
about $9 billion more than is needed to meet their obligations for years to
come.

Another of GM's pension programs, however, saddles the company with a
liability of $1.4 billion. These pensions are for its executives.

This is the pension squeeze companies aren't talking about: Even as many
reduce, freeze or eliminate pensions for workers -- complaining of the
costs -- their executives are building up ever-bigger pensions, causing the
companies' financial obligations for them to balloon.
---

More at (the whole piece ~3500 words):

http://makeashorterlink.com/?F13B3545D

or

mailman.lbo-talk.org/pipermail/lbo-talk/Week-of-Mon-20060619/040805.html

LBO-Talk is a mailing list associated with Doug Henwood's Left Business
Observer http://www.leftbusinessobserver.com/

Henwood's book "Wallstreet" can be downloaded for free at
http://www.leftbusinessobserver.com/WSDownload.html
(PayPal donations are very welcome, the author writes.)

Best regards
Franz Fuchs


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