Wednesday, April 7, 2010

UAW Becomes Giant Tick, Sucks U.S. Dry


Following our earlier post on the UAW suing Government General Motors, a friend sent us this story about the Government Accountability Office warning that U.S. taxpayers may have to cough up another $14.5 billion to bail out the UAW pensions of both Government General Motors and Chrysler.
Automakers General Motors and Chrysler will need to put billions of dollars into their pension plans over the next five years to meet their funding requirements, the Government Accountablity Office said Tuesday.

The GAO concluded that GM will have to add $12.3 billion by 2014, while Chrysler is expected to need $2.62 billion more during that time for its pension plan to keep it properly funded.

[snip]

The GAO said in a report that the future of those plans "remains uncertain" as the companies struggle to make money again.

Chrysler and GM will be able to meet their funding needs if they are profitable, the GAO said. The Treasury Department, which oversees the government's sizable stake in the two companies, believes that will happen.

But if GM and Chrysler falter and are forced to terminate their pensions, the government's Pension Benefit Guaranty Corporation insurance program would have to absorb $14.5 billion worth of company obligations to workers.

To read the GAO summary report (PDF), go here or to read the full 77-page (PDF) report, go here.

To read how to dispose of a tick, go here.

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