An anonymous GM retiree writes in:
Does anyone know that New GM is in the process of retiring about 25% or more of their executives with a fairly ‘normal’ retirement package? This means these execs who were at the healm leading into bankruptcy will be be getting almost a full retirement program including 90% of their earned SERP/ERP and half year’s salary in life insurance. This compares to all current retirees who lost 70% of their SERP and all of their life insurance except for $10k when GM came out of bankruptcy. The arrogance of the ‘new company’ that hasn’t made any money and is using public funds to continue in business is what we would have expected from the old company. Since this company is now owned by the government, can’t someone get at look at these numbers and see what the American taxpayer will be paying these people for the rest of their lives? I am a retiree and am grateful that we kept our retirement program at all. I am just shocked that the next retirees are not going to get similar cuts to their package.
A recent FastLane livechat on “Reinventing the GM Workplace” doesn’t provide any direct answers but does give an insight into GM’s priorities. Such as the idea that non-GM cars in GM employee parking lots “should be the first to go.” Writes GM’s Diana Tremblay, “people who work here should drive our products – I know there are personal cases that make it difficult but its more the attitude of not supporting the company that pays them.” Former CEO Rick Wagoner was set to receive $22 million but instead left with a mere $8.2 million.
I would imagine this has to do with protecting valued company info (I know all the jokes aside, even GM really doesn’t want thier long term business plans, capabilities and true costs being leaked to competitors). And screwing the executives that have this knowledge would not be the best way to keep it in house.
Sometimes what you know is worth alot more than what it is that you can actually do.
The new GM products should be boycotted, until they redirect most of that money to the lost labor force, and the taxpayers who put up the money.
I’ve been boycotting GM for years and will continue to do so. I’d rather drive a VW over a GM if that says anything. It’s too bad that GM is so mind-boggingly corrupt and as a result the line-workers that built their rolling moneybags (SUVs and trucks) get screwed in the end.
The good ole’ golden rule…..he with the gold makes the rules.
If Mr. Retiree is really fed-up, he should organize….effin’ start a facebook group, find Dennis Kucinich, find Jesse Jackson, do something.
Unless you organize now, no one’s going to care soon once the news becomes stale.
What a scam. New GM takes on all of these top managers that they know will be retiring. These managers provide virtually no benefit to the new company (being there for what, 60 or 90 days?), but they are in the club, so they ride through the bankruptcy as employees, then retire with full benefits once safely aboard the new company.
Another example of what a sham this bankruptcy was. Had new management been brought in to start the new company, you can bet that they would not have spent money needed for product and new talent on pensions for favored old timers.
Same old GM.
For those of you out there who are business owners, don’t try this sort of trick unless you are run by the President of the United States. Sham employee retirements and benefits transactions like these do not go over well with Federal judges.
Hope and Change!
Nobles don’t execute nobles; they execute peasants.
I’m sorry to hear about this turn of events but it is, unfortunately, standard corporate executive shananigans so I’m not surprised.
When John Snow, Chairman of Cerberus, Chrysler’s recent overlord, was Chairman of CSX Corporation he decided that he was worth a $77 MM severance once he was tapped to become U.S. Treasury Secretary. This jerk was responsible for a disasterous bidding war over Conrail, one that cost CSX stockholders about $5 Billion more than Conrail was worth, managed to half the value of CSX stock, a major portion of employees retirement accounts and then run off thousands of employees to pay for his folly.
He was a stellar Treasury Secretary; even W couldn’t stand him after only two years on the job. It didn’t take long for all to know that Snow had no idea what he was doing and was only capable of mouthing mealy, corporate, chiseling sad-sack horse$hit.
And…….for the coupe de grace, we have his stint at Ceberus and the $7.4 billion fiasco with Chrysler, chronicled often here on TTAC.
It’s unfortunate but not unexpected.
If memory serves me correctly the value of that ERP/SERP will cost you and I as the American Taxpayer about $1.5 billion.
Sounds like Nardelli. He was big at my dad’s company and when Home Depot took him my dad cringed. When he went to Chrysler, we all knew the end was at hand.
While I’m in no position to claim that this is fair or unfair (since details, particularly important for pensions, are lacking), I can argue that this article is misleading. New retirees have not received any pension benefits thus far, and current retirees have received payouts for some time at 100%. Thus, the 90-30 breakdown is not accurate.
For example, take two retirees that are equal in all respects, including what they are owed, except for when they retired. Assuming a 20 year expected pension payout, and a 6% discount rate, the described plan is exactly fair if the average current retiree is 6-7 years into retirement. That is, every retiree at the same pension scale receives the same real reduction in pension payouts. If you are more interested in effective percentage reductions in payouts (to compare people at different pension scales), the plan is fair if the average retiree is 14 years in. That is, the effective percentage reduction in pension benefits is exactly 10% for retirees that have been so for 14 years.
So, unless we consider the when retirees, well, retired, nobody can claim that this is fair or unfair (outside of the standard meta-arguments present).
Such as the idea that non-GM cars in GM employee parking lots “should be the first to go.” Writes GM’s Diana Tremblay, “people who work here should drive our products – I know there are personal cases that make it difficult but its more the attitude of not supporting the company that pays them.”
I love it when companies try this. They havent figured out that if they cant convince their own employees to buy their product, maybe there’s a reason?
In the 80’s I worked for a large regional grocery store chain when Price Club/Costco was up and coming. God help that one of us should be caught shopping there.
Yes, good old fashioned name calling and trying to turn the tables are the mark of a losing battle.
@frank rizzo:
Understand your point. Here is the issue. The new GM assumed the pension liabilities of the old GM. Under “typical” bankruptcy proceedings the ERP/SERP would have been wiped out. That would have meant significant haircuts for Wagonner and others. Instead they get virtually everything they were promised when they walked out the door. That amount stood at approximately $1.5 billion at yearend. That is your taxpayer dollars being used to reward the retirements of executives that should have received nothing but their qualified plan benefits at retirement. New day, same old shit!
“I am just shocked that the next retirees are not going to get similar cuts to their package.”
Ouch!
Such as the idea that non-GM cars in GM employee parking lots “should be the first to go.” Writes GM’s Diana Tremblay, “people who work here should drive our products – I know there are personal cases that make it difficult but its more the attitude of not supporting the company that pays them.”
Those are the FIRST people GM should be speaking with, especially if vaguely new-ish competitor vehicles.
Also, I’d be impressed if Fritz/Lutz were driving an Accord or a Prius. Maybe they’d get the MESSAGE!