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Old 04-16-2009, 11:42 AM   #21
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I agree that companies are held hostage from unions sometimes, but pension should never be promised if the companies know they never could honor them.

I hate the hole pension concept. It really is a ponzi scheme. A company has to continue to grow exponentially in order to pay out the false promise to it's retired. At some point, the party comes to an end!

In the end, the individual gets screwed.
you are CEO of GM in the 1980's or 1990's. UAW goes on strike and demands a long list of things like paying people to sit around and do nothing.

you have a choice to give in or not make any cars and see your customers go to buy the competition.
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Old 04-16-2009, 12:16 PM   #22
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As for trusting anyone else, everyone does.
Buying bonds, you are trusting the company/minicipality that is issuing those bonds.
Funds? You are trusting the company/broker that sold you the fund.
Equities, you are trusting the company directly.
Got a pension? You are trusting the people that developed the pension knew what they were doing and that the people running the pension can modify it as needed for different economic environments.
CD's at your bank, pretty safe but you are still trusting your bank to return your money and the promised interest.
Bury your money in your back yard, you are trusting your dog not to dig it up
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Old 04-16-2009, 12:19 PM   #23
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Bury your money in your back yard, you are trusting your dog not to dig it up
And trusting that runaway inflation won't make it nearly worthless.

In reality, there is no 100% risk-free place to put your money. No matter what you do with it, there is some form of risk.
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Old 04-16-2009, 12:52 PM   #24
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you are CEO of GM in the 1980's or 1990's. UAW goes on strike and demands a long list of things like paying people to sit around and do nothing.

you have a choice to give in or not make any cars and see your customers go to buy the competition.
Sitting back in my armchair Quarterback position, this is what I have to say about this. Let the darn unions sit on the line and fester! I know easier said than done, but if you promise something you know will fail in the future, you just agreed to a contract that will kill your company.

I know there is no easy answers, and all are to blame I guess. Geez, life is so complictated. And as others point out, even the things I think are safe, aren't necessarily a guarentee.

There is one thing I can count on. Me! I will not fail myself!
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Old 04-16-2009, 01:15 PM   #25
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or you give them what they want, collect the bonuses while times are good, and when the day of reckoning comes you don't care since you are retired or can retire on your own money. if you're a white collar worker than you probably have a 401k that will recover as well.

let the UAW sort out their own problems
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Old 04-16-2009, 01:19 PM   #26
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What will be the probable fate of GM retirees if the company goes into Chapter 11? My brother just retired after 38 years: many years with lots of 7 day work weeks and some wear and tear injuries that he never claimed but just worked through. Is there a chance that the retirement won't be fobbed to the federal fund?
You might find this article in the Detroit Free Press useful:

Anxiety about GM, Chrysler bankruptcies grips retirees | Freep.com | Detroit Free Press
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Old 04-16-2009, 04:12 PM   #27
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Thank you to Zathras, Gumby, Gearhead, Masterblaster and Travelover for substantive advice and/or helpful links. This is a tough situation that is affecting hundreds of thousands of people (and their famiies) who worked their butts off for decades. I fear the health problems (physical and mental) that are likely to increase in the aftermath.
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Old 04-17-2009, 07:43 AM   #28
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Thank you to Zathras, Gumby, Gearhead, Masterblaster and Travelover for substantive advice and/or helpful links. This is a tough situation that is affecting hundreds of thousands of people (and their famiies) who worked their butts off for decades. I fear the health problems (physical and mental) that are likely to increase in the aftermath.
And to the rest of us, not so much...
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Old 04-17-2009, 08:11 AM   #29
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Originally Posted by windsurf
This is a tough situation that is affecting hundreds of thousands of people (and their famiies) who worked their butts off for decades. I fear the health problems (physical and mental) that are likely to increase in the aftermath..............

Likewise for all of us suffering from huge losses from our 401K's..
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Old 04-17-2009, 09:44 AM   #30
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"I really feel for people who put their faith in a company or a Government system, and then get crapped on."

Give me a break. No one is getting "crapped on" - the unions demanded benefits that anyone who has mastered basic arithmatic couls see were unsustainable. Cry me a river. Those of us who have to - gasp - save for our retirement have difficulty mustering up sympathy for those who feel they're owed a guaranteed retirement with no contribution of their own.

For twenty years we've all heard how unsustainable the UAW pensions and benefits were, how they would bankrupt the company, and how it would someday break. Guess what - it happened. But it seems like those counting on the pensions willfully refused to believe what everyone else knew to be true.
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Old 04-17-2009, 10:39 AM   #31
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As mentioned earlier, the CEO's and upper management really didn't have many consequences to giving into UAW demands that would bankrupt the company 'later' after they left.
The UAW though, as an entity, would have to deal with the consequences as the workers (although not necessarily the same individuals) would be around when the house of cards falls down.
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Old 04-17-2009, 10:43 AM   #32
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As mentioned earlier, the CEO's and upper management really didn't have many consequences to giving into UAW demands that would bankrupt the company 'later' after they left.
The UAW though, as an entity, would have to deal with the consequences as the workers (although not necessarily the same individuals) would be around when the house of cards falls down.
Seems to be a recurring theme, doesn't it? A current decision-making body looking at a potential crisis and not trying to fix the long-term problem, but rather trying to defer the blow-up until they're long gone?
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Old 04-17-2009, 11:06 AM   #33
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Yeah - say hello to your local, state, and federal governments.
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Old 04-17-2009, 12:25 PM   #34
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Seems to be a recurring theme, doesn't it? A current decision-making body looking at a potential crisis and not trying to fix the long-term problem, but rather trying to defer the blow-up until they're long gone?
the rank and file have to vote on any new contract. few years ago they either voted down a proposed contract with chrysler or it passed with a very slim margin. i think the contract was supposed to reduce some medical benefits
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Old 04-17-2009, 12:31 PM   #35
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"I really feel for people who put their faith in a company or a Government system, and then get crapped on."

Give me a break. No one is getting "crapped on" - the unions demanded benefits that anyone who has mastered basic arithmatic couls see were unsustainable. Cry me a river. Those of us who have to - gasp - save for our retirement have difficulty mustering up sympathy for those who feel they're owed a guaranteed retirement with no contribution of their own.

For twenty years we've all heard how unsustainable the UAW pensions and benefits were, how they would bankrupt the company, and how it would someday break. Guess what - it happened. But it seems like those counting on the pensions willfully refused to believe what everyone else knew to be true.
I had a friend (retired labor mediator) who used to say the difference between the UAW and terrorists was that you could negotiate with terrorists.
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Old 04-17-2009, 12:33 PM   #36
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If I recall correctly, it was similar to the contract negotiated by the NYPD a few years ago. It essentially cut wages and benefits for unborn workers while grandfathering in then current workers. Nothing like closing the barn door after the horse got out. With the current economic conditions, our local governments have been scrambling to cut costs - with tax revenues down and having spent money like water in previous years, the well suddenly started to run dry. The county executive asked all county employees to take a 7% pay cut to be able to preserve all jobs. Predictably, the CSEA and police unions (police are very, very well paid here) refused to budge an inch. The result was that about 10% of the workforce lost their jobs.

At first blush a defined benefit plan is a contract between a worker and a company. But in reality, it ends up being a contract between an older worker and younger ones. Unless the pension started out fully funded, it would require increasing contributions to remain solvent as an increasing number of workers entered the retirement ranks.
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Old 04-17-2009, 12:34 PM   #37
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"I had a friend (retired labor mediator) who used to say the difference between the UAW and terrorists was that you could negotiate with terrorists."

From my local experience, the "negotiation" is largely limited to attempted bribery, intimidation, or political pressure.
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Old 04-17-2009, 12:50 PM   #38
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Why not turn all future pension plans over to the Unions?- they can fund and administer them out of Union dues- see how well that works...
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Old 04-17-2009, 01:05 PM   #39
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Why not turn all future pension plans over to the Unions?- they can fund and administer them out of Union dues- see how well that works...
Actually, many of the best-run pension plans I know of *are* administered by the unions themselves.

Think about it: who is likely to be a better steward of a pension fund: those whose retirements depend on its security, or those who have no direct vested interest in its long-term viability? Who's more likely to roll the dice and gamble on a hedge fund?
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Old 04-17-2009, 01:06 PM   #40
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Inc case of the Teamsters, it would appear that the vested interest lies with a bunch of guys whose names end in vowels.
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