I'm in that same boat. Not the retired part (I only wish :shades: ) but what I gained in 2007 and 2009 almost offsets the loss from 2008, so I figure I'm back to about 2006.
Basically, 401k's are what you make of them. Plus, it's not like defined benefit plans like pensions and such are truly guaranteed in stone anyway. Don't they get cut or eliminated altogether from time to time, depending on how well the company managed the assets?
Bulls make money; pigs get slaughtered. When something has returned a good increase, take 1/3 or 1/2 of it into something more stable. You'll lose some gains sometimes, but when the losses come you'll be happier.
Is this protectionism for unions - are any plants UAW? - or is it a bad thing to protect jobs. Most of the US name automakers are actually foreign-owned companies, aren't they?
Not sure if we even make any tires here. My new Michelins were made in Canada. My understanding tires made in China are cheap tires used on econoboxes. Further eroding the buying power of the little people that are not fortunate enough to make the big bucks like the UAW workers. I am sure it is just political posturing for Obama to try and regain some of the glamor he has lost since taking office. So we tack 35% tariff onto tires made in China and buy tires made in Indonesia. Indonesia may have more tire manufacturers than China from a Google search. Obama kind of reminds me of the little Dutch boy sticking his finger in a hole in the [non-permissible content removed].
Basically, 401k's are what you make of them. Plus, it's not like defined benefit plans like pensions and such are truly guaranteed in stone anyway. Don't they get cut or eliminated altogether from time to time, depending on how well the company managed the assets?
That's for sure. My father-in-law lost 1/2 his monthly pension when the PBGC took it over after LTV went belly up. Those who had less than 30 years service basically got nothing, so much for the guarantees of a pension. Thankfully my FIL invested in a 401k during his working years and it has saved him from still having to work.
Our 401k, IRA, 529 accounts (plus I made plenty this year in my personal brokerage account) have all rebounded to at or above 07 balances, but I do try to manage them to reduce our risk while boosting returns. Still got many years of working left.
Unfortunately, I own F stock in the VG 500 IX fund....got rid of GM by default. So, I can see only strife and further clouds hanging over an over leveraged Ford because the UAW are now even more entangled in the US Auto business or remnants thereof.
Interesting your view on Boeing....agree it's all a waste of time. Thanks for the insights. Clearly, change in management/staff relationships needs to take a much higher road than the past Union-displayed negotiations techniques...you hit me, I hit you is so Mafia!
Greed on either side just delays optimum business conditions for all involved.
The UAW was founded on the thug mentality that was so 1930s. They never gave it up. You can tell from the baseball bat wielding young UAW members. Add to that the mentality that really believes a guy with just a high school diploma or less is entitled to a high paying job, equal to or greater than someone that has a college degree. That was the past, and the important part of the message Obama gave to school kids. Without a college degree you will probably be flipping burgers. Unless you are one of the lucky ones that get a job at Walmart.
is that is the same mentality that Boeing's IAM members have. The "we want ours" who cares about what Boeing wants. And SPEEA just rallies it's members to be mini-me's of the IAM, just to keep everyone on their toes.
I am glad to be gone from the aerospace business and it's lack of loyalty and confidence in it's workers. It was a good job with good benefits yet it was horribly insecure to deal with on an ongoing basis.
I would think that approaching the Ford case with the UAW's...that the UAW's should try and breed more security by helping their Company through tough debt-laden times. Or is that too practical a way to think here? :sick:
I'm sure that if it comes down to survival of Ford vs. the UAW, the Ford family and Mulally will do whatever it takes. The UAW will be expendable. If they have to, Ford can start moving all of its production out of the country. The UAW had better fall in line or this will be the end of them.
I see that option. Still takes forty acres to turn a mini SUV. Just don't trust government motors. Isn't the 3.0L V6 the engine built in China for GM? You are a braver citizen than I buying from GM in the mess they have allowed the UAW to get them in.
In the traditional pension the risk of one out living their savings are not an issue, its factored in. In the 401K you have to fund for that case of a long retirement. I, too did well in the 401K and investments outside of the 401K. However, I made A's in macroeconomics and money&banking. Therefore we can only conclude we were fortunate and not the average worker.
You just don't get it do you? The reason so many corporations opted out of their pension plans was ERISA.
These pensions are invested in the stock market. If the market takes a big hit, these pensions would be UNDERFUNDED. Yeah, I get it. These so called investment gurus are nothing to say the least. The majority fail to beat the S&P average. Also get the GOP wanting to invest SS in the stock market. Always wanting to take care of their buddies on Wall Street. Can you imagine the investment management fees from this amount of money? Now can you defend Bush and his Wall Street buddies with any face?????
DD thinks that Ford has about 15 months worth of funds if the economy doesn't improve. Then they would have to tap gov't loans to stay afloat.
DD also thinks that all of the companies have to downsize and wait out the storm which is expected to be 48 months. However, if no one fuels the economy (consumers) we could have the same lost decade that Japan had.
Can you imagine the investment management fees from this amount of money? Now can you defend Bush and his Wall Street buddies with any face?????
No question that some financial advisers over charge. Kind of like UAW members and the leeches they have for leaders.
Even though you like to deflect away from the problems the UAW has created in the auto industry I will try to get you back on track. Just as you have said Pensions are in the same stock market as the 401K. So what is your beef? Or maybe I should ask this. Why should a corporation suffer all the loss when the market goes South? They put money into a pension plan that is set aside for employees. The market goes down the the Feds come in and force them to dump in good money after bad. It is no wonder the corporations bailed out of defined pension plans like rats from a sinking ship. Poorly run companies like GM were just so ignorant they thought they were too big to fail and did not plan for the future. The difference between us is you want the government to tell you when to get up and when to go to bed. I would rather do my own investing and take the risks myself. I was also very instrumental in getting our company to match funds in a 401K in addition to their contribution to the Teamster Pension plan. The more diversity in your portfolio the safer you are in these downturns. Quite frankly I don't trust any of them enough to put all my eggs in one basket. That would be the people in the UAW. Blinded by greed and poor leadership.
First of all, I thought that the pension plan for the UAW was pretty much fully funded. It was the costs associated with providing the health care coverage to retirees that there is not the money there to fully find.
In the past it was not so much that companies had pension funds invested in the stock market that was the problem, but rather that the pension funds were, in many cases, 100% funded with the company's own stock (think Enron). When the company tanked, so did the pension fund.
Feds come in and force them to dump in good money after bad
Probably, but there's another side to that. When the plan was doing good (stock market or company stock up), the feds allowed 'em to terminate the plan and take the excess money. So now you're left with a plan who's assets were sufficient when the plan was terminated (market up), but may not be so when the market turns down again. But, since the plan has been terminated, I don't think the company has any further obligation to fund it, though I may be wrong in this regard.
What Mr. Obama forgot to say is that a college degree is not the "magic bullet" it once was. If you have a degree in Liberal Arts, you'll STILL end up flipping burgers or greeting Wal~Mart customers! :sick:
There were cases of Union and corporate pension plans being pilfered. That was the reason we got ERISA. I think the GM plan was in good shape until the last downturn in 2008. I think it is still managing to pay all its retirees both UAW and non union. It was not mentioned in the C11.
Enron is a great example of a company screwing its employees. They did have a 401K loaded with Enron stock. When the crooks started selling off their stock the employees were blocked in their individual 401Ks. So you had a lot of sad stories in that whole mess.
The design of Enron's 401K savings plan, he says, contributed substantially to employee losses. Enron limited employees' investment freedom from the start by matching their contributions only with company stock and by preventing employees from selling that stock until age 50.Enron 401K
If a pension plan was terminated the employees were supposedly given a comparable amount in a 401K to invest as they wished. For those that took the high risk high yield investments that lose on every down turn, who's fault is it? DD would like to blame Wall ST or the GOP. When someone like himself gets lucky and makes a lot of money on the Capitalist stock market he likes to act like he was the smart one. He wants it both ways. He likes taking the bounty of the Capitalist society and wants to be protected by a Socialist ideology. Much like the elites that run this country and the world.
That is the UAW in a nutshell. They want all the bounty and none of the risk.
I just heard parts of a person talking about the healthcare proposals and saying that trojan horses in them will organize the healthcare providers and contractors. There are 5 parts in the plans that will do this. I didn't hear all. And I believe the credit ascribed at the end was National Right to Work Association or Committee.
There may be more efforts to reinforce the Unions beyond giving the UAW life after bankruptcy at the expense of the taxpayer and automakers' futures.
can't make it as a good bartender? Keep the loaded piles of nonsense going to anyone who will listen and be a good listener to all of the lovelorn. It is an important job.
What jobs are available to Philosophy majors anyway? Professorships teaching Philosophy to other suckers...I...I mean other Philosophy students? Man, talk about a subject that tells the business world "I'm only here to fool around whilst at college, I really don't know what I want to do when I grow up!" :P
Heck, with downward wage pressures in many fields, and declining real incomes for most, bartenders might make more than many who have supposedly higher ranking jobs, especially if they work in a popular area.
DD thinks that Ford has about 15 months worth of funds if the economy doesn't improve. Then they would have to tap gov't loans to stay afloat.
Ford would be selling a lot more if the government had not stepped in to keep that failure of a company GM from bellying up. The governement protectionism is not helping Ford. Look how militant the UAW is toward Ford - they may still drive F into failure.
He was working in a fancy restaurant in Seattle. He just started his post grad work at San Francisco state and is getting settled in before he looks for a job to keep him going. Bar tending is a great job for college kids. It would not surprise me to see him stay in that business. His goal is a think tank. I would imagine you have to be born into one of those cushy jobs. Similar to getting a job in the UAW.
Think tanks...which are always beholden to whichever special interest group that provides the salaries and produces nothing of value...sounds perfect for the philosophy/liberal arts/poly sci major :shades:
No more defendable than the worst of union abuses.
Boeing Co. workers in North Charleston voted overwhelmingly to disband their union in a move that could give the region an edge in landing an aircraft plant the company is looking to build.
Of the 267 ballots cast, 199 were in favor of de-certifying the election that made them members of the International Association of Machinists. The company was pleased; the union was disappointed.
The local plant makes rear fuselage sections for Boeing's 787, a new fast-selling lightweight jet that has been delayed by snags with suppliers and an eight-week strike last year by the IAM.
Boeing has said it would consider North Charleston and its manufacturing hub outside Seattle, among other sites, for a new 787 assembly plant. A decision is expected by the end of the year.
I love to cut and paste! There's no union for the Int'l Cut and Past Workers, is there? I wouldn't want to cross the picket line!
".....They put money into a pension plan that is set aside for employees. The market goes down the the Feds come in and force them to dump in good money after bad. "
Gary, correct me if I'm wrong but, if the people who are paid to manage the pension funds (just like the people that are paid to manage 401k's) did their jobs right, then when the market rebounds, the fund should get paid back in spades, based on the buy low (down market) sell high (booming market) principle. One would think that, just like a 401k, even with rules, the potential for making big money exists.
For example; lets say a companies pension fund is worth $1.09 billion. It's liabilities are $1 billion. That $1 bil should be in "safe" investments, while the other $90 mil can be gambled with more aggressively. If the company needs to add say, $5,000 per active employee per year, they should be required to, regardless of the pension's worth. This SHOULD keep the pension overfunded, even in lean years.
This statement says it all about pension failures in my mind:
".....Poorly run companies like GM were just so ignorant they thought they were too big to fail and did not plan for the future."
You say you would rather do your own investing. I like to too, only to a certain extent. I feel a lot safer "doing it myself" and choosing my own investment strategies in my 401k and stock portfolio because SOMEONE ELSE is taking care of my pension. If it were all left up to me, I'd be spending time I don't have investigating investments, or paying someone else to do it. Either way, SOMEBODY is making a living off of planning for my future.
For those that took the high risk high yield investments that lose on every down turn, who's fault is it? DD would like to blame Wall ST or the GOP.
I just want to point out that if high returns are desired by shareholders the CEO folk will take higher risk. Hence, they are rewarded with high CEO/executive compensation. Whats wrong with safe sure thing in some of these institutions? Like banks used to have/offer prior to deregulation.
Nissan and Toyota also bet the farm on the profitable SUV market. Their workers will also suffer along the UAW workers, whom through no fault of their own, are to suffer for the greed mentality. The short term profits are what drive the corporate world and profits are what drive CEO/executive compensation.
Ford would be selling a lot more if the government had not stepped in to keep that failure of a company GM from bellying up.
You really don't think that someone wouldn't buy GM as parts/divisions? I'm sure China is chomping at the thought of having the distribution channels alone.. For that matter they could aquire it (GM) entirely and pay cash.
Investors in actively managed mutual funds the last five years have reason to wonder what they've been paying for: A new study from Standard & Poor's finds that 70% of large-cap fund managers who use the S&P 500 as a benchmark for comparison have failed to match the performance of the index over that time.
Not to mention that these think tanks lack any peer review. Many say that think tanks are where PHD's go to die. It tells you what the well connected think of the masses. That you will buy whatever an educated person tells you as gospel. Wonder what think tanks say about the UAW?
As usual South Carolina's working man has been convinced to vote against thier own interest. We need to re-brand the`state: Welcome`to SC where we're working to bring back the plantation system.
You really don't think that someone wouldn't buy GM as parts/divisions? I'm sure China is chomping at the thought
I say let the Chinese buy it. I imagine Barry will be more than ready to sell before long. The UAW would see what tough management is like with the Chinese running the show. The greedy bunch running GM the last 20 years have buckled to the UAW and now we are stuck with the result.
There was plenty of greed to go around. The UAW workers and leaders were just as greedy as the management when it came to selling high profit SUVs. Besides that is what the people wanted in the decadent 90s. They all cut a fat hog during that time and should have saved some for the future. Not my fault if people live on OT when they are making a fortune, then go broke when the OT is gone. 1000s of greedy UAW workers fit in that picture.
You really don't think that someone wouldn't buy GM as parts/divisions?
Somebody would have bought the PROFITABLE parts, and GM would have been sliced a lot more than it has been. Somebody buying would have been highly motivated to make it profitable, more than the US Govt will be.
With GM still having overcapacity, it hurts Ford, the company that has NOT accepted tax money and has been much better managed.
If it were all left up to me, I'd be spending time I don't have investigating investments, or paying someone else to do it.
Google "lazy portfolio" for a low-maintenance approach to investing that relies mainly on index funds that don't try to beat the indices. Once you've set it up, you spend only a couple of hours once or twice a year tweaking it. I've been doing this for the past 4 years with Vanguard funds (don't work for Vanguard but love their low fees & great customer service) & am quite happy with the results. It's a great way to get rich slowly. I only wish I could have started doing this 30 years ago.
Now let's step back for a look at the bigger picture. The golden age of private sector defined benefit pension plans ran from about 1950 until 1980. (By 1985, many companies - my old employer included - were shutting down these plans & replacing them with defined contribution plans.) Even then, only those who worked for large corporations - a minority of the American work force - were covered. I don't think that any "new economy" corporation (Intel, Microsoft, etc.) offers a traditional pension plan & I can't imagine that any future corporation, no matter how large or successful, will take on that burden.
Bottom line: unless new laws are passed to force companies to offer traditional pensions - no one is seriously proposing this - almost all of us who don't work for government will plan our own retirement, whether we want to (I do) or not.
The healthcare plans to tax insurance companies for gold-plated plans along with other taxes are written to exempt the gold-plated healthcare plans for union workers. Surprise. Surprise. This from the presidential campaign candidate who promised to remove lobbyists and so on from DC. Promised the most transparent presidency... and now we find with all the new taxes unions are going to be benefited with the same old problems they've caused that broke our manufacturing--high pay and high legacy benefits.j
Now only will they get gold-plated care worth of a congressman (exempt from healthcare mandates on us little folk) but they will have their high cost plans that may break their companies insured, insured by us little folk paying taxes to Uncle Obama or whoever the next president is.
What's wrong with this picture of special treatment for unions? :P
Bottom line: unless new laws are passed to force companies to offer traditional pensions - no one is seriously proposing this - almost all of us who don't work for government will plan our own retirement, whether we want to (I do) or not.
I am happy that I have my Alaska Teamster multi employer pension plan. Not all plans are run as well as ours. Including the Teamster International pension plan. When it comes to corporate plans, no thank you. I worked 9 years for Pacific Telephone and get ZERO pension from them. I worked with a fellow that had 15 years with AT&T and he got a whopping $207 per month at age 65. He then spent 17 years as a manager with RCA. They gave him a $38k cash taxable settlement in lieu of a pension when they were bought out by GE. He ended up working till he was 75 years old in the Teamster job to get a pension he could live on. Negotiating as much matching contribution into a 401K is the best choice with the least risk. If you want to gamble your 401K you are free to do that. I consider that better than the company gambling your retirement and losing.
The difference being ideology. Either we are free to make our own choices or we are wards of the state. Some here mistakenly believe you can have it both ways.
And it's all at the cost of the American people. Someone has to pay for all those frills and thrills. China crap cars coming to a town near you. You went from the big three to the big three CCC. UNION"S are crap! Unions are for lazy people that think their work is worth more than other folks work. Unions will be a thing of the past soon. I think! I hope!
"Wonder what think tanks say about the UAW?"...if they have their heads on straight, they think that the UAW has been one of the worst destructive forces to American industry in recorded history...
Poor workmanship, lousy attitude, unskilled yet severely overpaid, overcome by the welfare-entitlement attitude that is destroying our cities...what else CAN they think about it???...you think folks bought Hondas and Toyotas because the Big 3 products were textbook examples of QUALITY???...I hardly think so...the Big 3, by and thru the UAW, made boat-anchor junk and thought we wouldn't care...well, we did care, and we bought an alternative product...
You can try and defend the UAW all you want, the American consumer made their choice and deserted the Big 3 in droves...GM and C are bankrupt and still the UAW is probably waiting to strike somewhere...how anyone can defend the UAW with a straight face amazes me (altho, DD, I really can't see your face here, but I can try and give you one of mine...:)...)
What have you done for me lately? Given the current economic conditions and the culture which is rewarding the CEO/executives highly, (which in turn puts pressure on them to take greater risk) GM isn't the only company mismanaged. Its very common in fact. Now could you tell me all about the reform done as a result of the Wall Street meltdown? Where are the concessions?
The verdict on that strategy is not easy to render. Certainly, the sales of Hughes' parts and the spinoff of E.D.S. have been lucrative, even taking into consideration inflation and additional investments. When G.M. shareholders approved the spinoff of E.D.S. five years ago, the company's $2.5 billion purchase was worth $27.6 billion. And after paying $5 billion for Hughes in 1985, G.M. has since sold its pieces for $9.5 billion to Raytheon, $3.75 billion to Boeing, and, in its latest deal, EchoStar will pay $26 billion.
Not really sure the point you are trying to make. It shows GM had a lot of valuable assets in the late 1990s. After losing $20 billion on the 1998 UAW strike they had to sell many of the good assets to keep the bad ones afloat. They had way more retirees to support than they anticipated. $7billion a year for health care on the retirees was more than they could handle. So now we are stuck paying the bills.
If what the NYT article reported is accurate, maybe GM management just missed their calling! Sounds like they should have just ditched the car company (that was already losing money) and the UAW, become a private equity firm, and started making money by buying, dismantling, and selling existing companies.
I would agree. They also left out selling controlling interest in GMAC the only US money maker they owned at the time. They were still strapped with old bad contracts with UAW retirees that just won't go away. There is no way that GM can make enough money selling cars in the USA. Even with VEBA taking over the retiree health care it looks bleak.
Going back in time. One can see that the UAW was making sure that GM was properly funding the collective bargaining units pension fund. The big mismatch of 2002 showed pension officials that stocks could produce more volatility than a mature pension fund like G.M.'s could bear. The company could not wait for stock prices to come back up eventually, because it had 400,000 retirees waiting to be paid about $7 billion every year.
With that in mind, G.M. sold more than $14 billion of bonds in 2003 and put the proceeds into its pension fund, making up for the preceding years' losses. It also put in the proceeds of the sale of its Hughes Electronics, for a total contribution of more than $18 billion. That was far more than the minimum required that year.
The big contributions got rid of the fund's shortfall. This also gave GM special treatment, as accounting rules go, and thereby beefed their bottomline.
Then, over several years, G.M. overhauled its investment portfolio, replacing billions of dollars worth of stocks with bonds, and adding derivatives to make the duration of the bonds better match the schedule of payments to retirees.
Bond prices can swing too, but G.M. plans to hold the bonds for their interest, not sell them. The company believed the interest payments would be more than enough to produce the $7 billion owed to retirees every year.
The salaried retirees say that they'll be even worse off than the UAW workers. The head of their retiree association is quoted in the Detroit News as saying that he thinks they'll end up losing 50-60% of their pension if the plan is taken over by the PBGC.
So their blowing off organizing is going to cost them. Can't say the UAW didn't make them the offer. However, both will lose in the medical benefits, which are uncovered by the GM and or under the PBGC. Then again there is a fund operated by the UAW to cover some of the retired members. How big and how much is yet to be seen.
This is a perfect reason/example for having a union/UAW representing workers. The non-union folks certainly got the short end of the stick here. You can certainly bet on if they could go back in time, they would have opted for representation.
Comments
Basically, 401k's are what you make of them. Plus, it's not like defined benefit plans like pensions and such are truly guaranteed in stone anyway. Don't they get cut or eliminated altogether from time to time, depending on how well the company managed the assets?
In re Unions: Chinese tires get tariffs (at last)
Is this protectionism for unions - are any plants UAW? - or is it a bad thing to protect jobs. Most of the US name automakers are actually foreign-owned companies, aren't they?
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That's for sure. My father-in-law lost 1/2 his monthly pension when the PBGC took it over after LTV went belly up. Those who had less than 30 years service basically got nothing, so much for the guarantees of a pension. Thankfully my FIL invested in a 401k during his working years and it has saved him from still having to work.
Our 401k, IRA, 529 accounts (plus I made plenty this year in my personal brokerage account) have all rebounded to at or above 07 balances, but I do try to manage them to reduce our risk while boosting returns. Still got many years of working left.
Interesting your view on Boeing....agree it's all a waste of time. Thanks for the insights. Clearly, change in management/staff relationships needs to take a much higher road than the past Union-displayed negotiations techniques...you hit me, I hit you is so Mafia!
Greed on either side just delays optimum business conditions for all involved.
Regards,
OW
The UAW was founded on the thug mentality that was so 1930s. They never gave it up. You can tell from the baseball bat wielding young UAW members. Add to that the mentality that really believes a guy with just a high school diploma or less is entitled to a high paying job, equal to or greater than someone that has a college degree. That was the past, and the important part of the message Obama gave to school kids. Without a college degree you will probably be flipping burgers. Unless you are one of the lucky ones that get a job at Walmart.
I am glad to be gone from the aerospace business and it's lack of loyalty and confidence in it's workers. It was a good job with good benefits yet it was horribly insecure to deal with on an ongoing basis.
I would think that approaching the Ford case with the UAW's...that the UAW's should try and breed more security by helping their Company through tough debt-laden times. Or is that too practical a way to think here? :sick:
2021 Kia Soul LX 6-speed stick
You can get it w/ the 3.0 V-6 as well.
Nope, just a smaller version of the 3.6L. No braver buying a Buick than a Toyota.
These pensions are invested in the stock market. If the market takes a big hit, these pensions would be UNDERFUNDED. Yeah, I get it. These so called investment gurus are nothing to say the least. The majority fail to beat the S&P average. Also get the GOP wanting to invest SS in the stock market. Always wanting to take care of their buddies on Wall Street. Can you imagine the investment management fees from this amount of money? Now can you defend Bush and his Wall Street buddies with any face?????
DD also thinks that all of the companies have to downsize and wait out the storm which is expected to be 48 months. However, if no one fuels the economy (consumers) we could have the same lost decade that Japan had.
No question that some financial advisers over charge. Kind of like UAW members and the leeches they have for leaders.
Even though you like to deflect away from the problems the UAW has created in the auto industry I will try to get you back on track. Just as you have said Pensions are in the same stock market as the 401K. So what is your beef? Or maybe I should ask this. Why should a corporation suffer all the loss when the market goes South? They put money into a pension plan that is set aside for employees. The market goes down the the Feds come in and force them to dump in good money after bad. It is no wonder the corporations bailed out of defined pension plans like rats from a sinking ship. Poorly run companies like GM were just so ignorant they thought they were too big to fail and did not plan for the future. The difference between us is you want the government to tell you when to get up and when to go to bed. I would rather do my own investing and take the risks myself. I was also very instrumental in getting our company to match funds in a 401K in addition to their contribution to the Teamster Pension plan. The more diversity in your portfolio the safer you are in these downturns. Quite frankly I don't trust any of them enough to put all my eggs in one basket. That would be the people in the UAW. Blinded by greed and poor leadership.
In the past it was not so much that companies had pension funds invested in the stock market that was the problem, but rather that the pension funds were, in many cases, 100% funded with the company's own stock (think Enron). When the company tanked, so did the pension fund.
Feds come in and force them to dump in good money after bad
Probably, but there's another side to that. When the plan was doing good (stock market or company stock up), the feds allowed 'em to terminate the plan and take the excess money. So now you're left with a plan who's assets were sufficient when the plan was terminated (market up), but may not be so when the market turns down again. But, since the plan has been terminated, I don't think the company has any further obligation to fund it, though I may be wrong in this regard.
Enron is a great example of a company screwing its employees. They did have a 401K loaded with Enron stock. When the crooks started selling off their stock the employees were blocked in their individual 401Ks. So you had a lot of sad stories in that whole mess.
The design of Enron's 401K savings plan, he says, contributed substantially to employee losses. Enron limited employees' investment freedom from the start by matching their contributions only with company stock and by preventing employees from selling that stock until age 50.Enron 401K
If a pension plan was terminated the employees were supposedly given a comparable amount in a 401K to invest as they wished. For those that took the high risk high yield investments that lose on every down turn, who's fault is it? DD would like to blame Wall ST or the GOP. When someone like himself gets lucky and makes a lot of money on the Capitalist stock market he likes to act like he was the smart one. He wants it both ways. He likes taking the bounty of the Capitalist society and wants to be protected by a Socialist ideology. Much like the elites that run this country and the world.
That is the UAW in a nutshell. They want all the bounty and none of the risk.
There may be more efforts to reinforce the Unions beyond giving the UAW life after bankruptcy at the expense of the taxpayer and automakers' futures.
The union mentioned in the article was SEIU.
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"Well, as Socrates would say..."
What jobs are available to Philosophy majors anyway? Professorships teaching Philosophy to other suckers...I...I mean other Philosophy students? Man, talk about a subject that tells the business world "I'm only here to fool around whilst at college, I really don't know what I want to do when I grow up!" :P
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Ford would be selling a lot more if the government had not stepped in to keep that failure of a company GM from bellying up. The governement protectionism is not helping Ford. Look how militant the UAW is toward Ford - they may still drive F into failure.
No more defendable than the worst of union abuses.
Of the 267 ballots cast, 199 were in favor of de-certifying the election that made them members of the International Association of Machinists. The company was pleased; the union was disappointed.
The local plant makes rear fuselage sections for Boeing's 787, a new fast-selling lightweight jet that has been delayed by snags with suppliers and an eight-week strike last year by the IAM.
Boeing has said it would consider North Charleston and its manufacturing hub outside Seattle, among other sites, for a new 787 assembly plant. A decision is expected by the end of the year.
I love to cut and paste! There's no union for the Int'l Cut and Past Workers, is there? I wouldn't want to cross the picket line!
Regards,
OW
Gary, correct me if I'm wrong but, if the people who are paid to manage the pension funds (just like the people that are paid to manage 401k's) did their jobs right, then when the market rebounds, the fund should get paid back in spades, based on the buy low (down market) sell high (booming market) principle. One would think that, just like a 401k, even with rules, the potential for making big money exists.
For example; lets say a companies pension fund is worth $1.09 billion. It's liabilities are $1 billion. That $1 bil should be in "safe" investments, while the other $90 mil can be gambled with more aggressively. If the company needs to add say, $5,000 per active employee per year, they should be required to, regardless of the pension's worth. This SHOULD keep the pension overfunded, even in lean years.
This statement says it all about pension failures in my mind:
".....Poorly run companies like GM were just so ignorant they thought they were too big to fail and did not plan for the future."
You say you would rather do your own investing. I like to too, only to a certain extent. I feel a lot safer "doing it myself" and choosing my own investment strategies in my 401k and stock portfolio because SOMEONE ELSE is taking care of my pension. If it were all left up to me, I'd be spending time I don't have investigating investments, or paying someone else to do it. Either way, SOMEBODY is making a living off of planning for my future.
I just want to point out that if high returns are desired by shareholders the CEO folk will take higher risk. Hence, they are rewarded with high CEO/executive compensation. Whats wrong with safe sure thing in some of these institutions? Like banks used to have/offer prior to deregulation.
Nissan and Toyota also bet the farm on the profitable SUV market. Their workers will also suffer along the UAW workers, whom through no fault of their own, are to suffer for the greed mentality. The short term profits are what drive the corporate world and profits are what drive CEO/executive compensation.
You really don't think that someone wouldn't buy GM as parts/divisions? I'm sure China is chomping at the thought of having the distribution channels alone.. For that matter they could aquire it (GM) entirely and pay cash.
http://seekingalpha.com/article/153574-ford-takes-advantage-of-cash-for-clunkers-
http://www.businessweek.com/1999/99_08/b3617008.htm
http://www.allbusiness.com/finance/102356-1.html
http://www.filife.com/stories/indexes-beat-most-actively-managed-funds-sp-says
http://www.scdhec.gov/health/disease/stdhiv/hopwa.htm
http://www.city-data.com/forum/south-carolina/743301-record-unemployment-lower-p- ay-likely-increase.html
http://www.thestate.com/local/story/930939.html?RSS=local
I say let the Chinese buy it. I imagine Barry will be more than ready to sell before long. The UAW would see what tough management is like with the Chinese running the show. The greedy bunch running GM the last 20 years have buckled to the UAW and now we are stuck with the result.
There was plenty of greed to go around. The UAW workers and leaders were just as greedy as the management when it came to selling high profit SUVs. Besides that is what the people wanted in the decadent 90s. They all cut a fat hog during that time and should have saved some for the future. Not my fault if people live on OT when they are making a fortune, then go broke when the OT is gone. 1000s of greedy UAW workers fit in that picture.
Somebody would have bought the PROFITABLE parts, and GM would have been sliced a lot more than it has been. Somebody buying would have been highly motivated to make it profitable, more than the US Govt will be.
With GM still having overcapacity, it hurts Ford, the company that has NOT accepted tax money and has been much better managed.
Google "lazy portfolio" for a low-maintenance approach to investing that relies mainly on index funds that don't try to beat the indices. Once you've set it up, you spend only a couple of hours once or twice a year tweaking it. I've been doing this for the past 4 years with Vanguard funds (don't work for Vanguard but love their low fees & great customer service) & am quite happy with the results. It's a great way to get rich slowly. I only wish I could have started doing this 30 years ago.
Now let's step back for a look at the bigger picture. The golden age of private sector defined benefit pension plans ran from about 1950 until 1980. (By 1985, many companies - my old employer included - were shutting down these plans & replacing them with defined contribution plans.) Even then, only those who worked for large corporations - a minority of the American work force - were covered. I don't think that any "new economy" corporation (Intel, Microsoft, etc.) offers a traditional pension plan & I can't imagine that any future corporation, no matter how large or successful, will take on that burden.
Bottom line: unless new laws are passed to force companies to offer traditional pensions - no one is seriously proposing this - almost all of us who don't work for government will plan our own retirement, whether we want to (I do) or not.
Now only will they get gold-plated care worth of a congressman (exempt from healthcare mandates on us little folk) but they will have their high cost plans that may break their companies insured, insured by us little folk paying taxes to Uncle Obama or whoever the next president is.
What's wrong with this picture of special treatment for unions? :P
2014 Malibu 2LT, 2015 Cruze 2LT,
I am happy that I have my Alaska Teamster multi employer pension plan. Not all plans are run as well as ours. Including the Teamster International pension plan. When it comes to corporate plans, no thank you. I worked 9 years for Pacific Telephone and get ZERO pension from them. I worked with a fellow that had 15 years with AT&T and he got a whopping $207 per month at age 65. He then spent 17 years as a manager with RCA. They gave him a $38k cash taxable settlement in lieu of a pension when they were bought out by GE. He ended up working till he was 75 years old in the Teamster job to get a pension he could live on. Negotiating as much matching contribution into a 401K is the best choice with the least risk. If you want to gamble your 401K you are free to do that. I consider that better than the company gambling your retirement and losing.
The difference being ideology. Either we are free to make our own choices or we are wards of the state. Some here mistakenly believe you can have it both ways.
Poor workmanship, lousy attitude, unskilled yet severely overpaid, overcome by the welfare-entitlement attitude that is destroying our cities...what else CAN they think about it???...you think folks bought Hondas and Toyotas because the Big 3 products were textbook examples of QUALITY???...I hardly think so...the Big 3, by and thru the UAW, made boat-anchor junk and thought we wouldn't care...well, we did care, and we bought an alternative product...
You can try and defend the UAW all you want, the American consumer made their choice and deserted the Big 3 in droves...GM and C are bankrupt and still the UAW is probably waiting to strike somewhere...how anyone can defend the UAW with a straight face amazes me (altho, DD, I really can't see your face here, but I can try and give you one of mine...:)...)
The verdict on that strategy is not easy to render. Certainly, the sales of Hughes' parts and the spinoff of E.D.S. have been lucrative, even taking into consideration inflation and additional investments. When G.M. shareholders approved the spinoff of E.D.S. five years ago, the company's $2.5 billion purchase was worth $27.6 billion. And after paying $5 billion for Hughes in 1985, G.M. has since sold its pieces for $9.5 billion to Raytheon, $3.75 billion to Boeing, and, in its latest deal, EchoStar will pay $26 billion.
http://www.nytimes.com/2001/10/30/business/with-hughes-sale-gm-buries-a-discarde- d-strategy.html
Another diversion. What does financial mismanagement have to do with the UAW? Two wrongs don't make a right! :P
At last, we agree. Add the mis-managed UAW layer to that fact and it's curtains!
Regards,
OW
I would agree. They also left out selling controlling interest in GMAC the only US money maker they owned at the time. They were still strapped with old bad contracts with UAW retirees that just won't go away. There is no way that GM can make enough money selling cars in the USA. Even with VEBA taking over the retiree health care it looks bleak.
I'll bet a good many that will join these shelters across the company WERE in Unions. :P
Thier Own Worst Enemy
Regards,
OW
With that in mind, G.M. sold more than $14 billion of bonds in 2003 and put the proceeds into its pension fund, making up for the preceding years' losses. It also put in the proceeds of the sale of its Hughes Electronics, for a total contribution of more than $18 billion. That was far more than the minimum required that year.
The big contributions got rid of the fund's shortfall. This also gave GM special treatment, as accounting rules go, and thereby beefed their bottomline.
Then, over several years, G.M. overhauled its investment portfolio, replacing billions of dollars worth of stocks with bonds, and adding derivatives to make the duration of the bonds better match the schedule of payments to retirees.
Bond prices can swing too, but G.M. plans to hold the bonds for their interest, not sell them. The company believed the interest payments would be more than enough to produce the $7 billion owed to retirees every year.
The salaried retirees say that they'll be even worse off than the UAW workers. The head of their retiree association is quoted in the Detroit News as saying that he thinks they'll end up losing 50-60% of their pension if the plan is taken over by the PBGC.
So their blowing off organizing is going to cost them. Can't say the UAW didn't make them the offer. However, both will lose in the medical benefits, which are uncovered by the GM and or under the PBGC. Then again there is a fund operated by the UAW to cover some of the retired members. How big and how much is yet to be seen.
This is a perfect reason/example for having a union/UAW representing workers. The non-union folks certainly got the short end of the stick here. You can certainly bet on if they could go back in time, they would have opted for representation.