The Next GM Pension Plan

March 30, 2009

gm-car

Because of its long term pension liabilities, GM is worth more dead than alive.  I doubt any automaker or wealthy investor (other than the U.S. Government) will touch it prior to its evenutal bankruptcy.

The company’s crazy pension commitments are just crazy.   As of last year they were costing the company $1,300 per car.  With GM sales down something ridiculous – over 50% in February from the year prior – pension costs this year will cost over $2,000 per vehicle.

What’s a GM pensioner to do?  Well, nothing, really.  The pensioner can sit on his or her ass all he or she wants and will still collect until the company is sucked dry.  After that, who knows?  For some reason I think I’ll be helping to pick up the tab.

Here’s my suggestion after the bankruptcy:  Offer up a pension amount fixed at some amount per car.  Let’s say the company agrees to put $1,000 per car into the pension account.  Take the total car sales for the year, multiply by $1,000 and divide by the number of pensioners; that’s the amount each pensioner will get the following year.

This has some real advantages over the current scheme, mainly that pensioners could make out really well in good years, and they have an incentive to help GM make sure it has good years.  And I won’t have to subsidize them through some government support package.

Just a thought.

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Modern Vehicle Safety

December 3, 2008

steves-car-accident

My friend Steve was broadsided today by a guy who ran the red light in front of our facility.  Just a few years ago Steve’s head would have shattered the driver side window, and maybe shredded his brain in the process.

But today Steve walked away with a just an air bag brush burn on his forehead.  His Acura (with those well-designed door pillars) was still driveable.  The other driver bulls-eyed Steve’s car right between the wheels.  The sun was out, the roads were dry.  The guy simply wasn’t paying attention.  Maybe he was texting or something.

I will never buy another car without front and side air bags.