Guess who is the First Auto Company to Default on workers pensions?
 

 

Toyota to hand off pension bill to U.S. BY GREG GARDNER FREE PRESS BUSINESS WRITER Toyota is leaving a $131-million pension shortfall to the Pension Benefit Guaranty Corp. as it closes the New United Motor Manufacturing Inc. plant in Fremont , Calif. , April 1, said Sergio Santos, president of UAW Local 2244. But the PBGC, a federal corporation charged with protecting pension benefits of 44 million Americans, wants to discuss ways Toyota can reduce the gap. The agency has taken legal action to gain control of the NUMMI pension plan. PBGC spokesman Gary Pastorius said the agency wants to talk to Toyota about alternatives to a takeover, "but it just hasn't happened yet. We still have questions." NUMMI said it had met its obligations regarding the plan when the PBGC began court action, according to a memo issued by Tracy Wakefield, a human resources manager. Toyota operated NUMMI jointly with General Motors from 1983 until GM's withdrawal last summer. Santos said NUMMI and Toyota imposed a "gag order that I believe violates our First Amendment rights," preventing workers from commenting on the plant closure. NUMMI spokesman Lance Tomasu said the union voluntarily pledged not to denigrate NUMMI or Toyota as part of the shutdown agreement. In recent days, Toyota sweetened the severance offer from $253 million to $281 million for the about 4,500 NUMMI workers, Santos said. Each hourly worker will receive a base severance of $21,175, plus supplements that vary based on years of service, the union president said. On March 3, the PBGC said it would cover $126 million of a $131-million underfunding in the pension covering NUMMI's UAW workers. The agency said $5 million of supplemental benefits are not insured. Harley Shaiken, a University of California Berkeley professor and labor relations expert, said the pension shortfall adds to Toyota 's public relations challenges. "For the world's most profitable automaker to walk away from a pension covering people who, in some cases, worked for more than a quarter of a century doesn't look good," Shaiken said. "Especially in the wake of Toyota 's recent recalls."

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Joel Adams
C3VR Lifetime Member #56    
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"Money can't buy happiness -- but somehow it's more comforting to cry in a CORVETTE than in a Kia"

Oh man. I just unloaded all my fabulous Japanese machinery (and they served me well. for 15 to 20 yrs. each, until they developed electrical problems) and bought old Chevy's, YAYYYY ! The wife still commutes, and has her Corolla, and you know I'm not going to try to tell her what to do , but, as for me, I'm stickin' with old cars that I can diagnose and fix myself when they have problems, and not have to rely on a computer to give me codes (clues) to figure out.

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Jimmy B.
Just can't wait to get on the road again.

 
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Interesting article, but we all knew this would eventually happen, at least I did. In 2005 I read an article from GM that said about $1500 of every car manufactured was charged just to pay benefits of the current work force, and almost that for retirees. That come to about $3000 per car just to pay the benefits. How long can that last? When the economy turned, and sales on new cars dropped, how much you figure that number changed? You can not pay people not to work, it just makes no sense. Retirement (except for retired military IMO, and no I am NOT retired, nor will I recieve a military pension), should be a personal responsibility, and not a corporations.

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As someone who is effected by the PBGC( the company I worked for went bankrupht)and I cann't get my PBGC pension until 65.The ones I feel sorry for is those who already retired.The PBGC recalulated their pensions and in most cases they got less.The really sad part about this is a person works toward the goal of retiring with a good pension,then something like this happens and they lose out.But the corpate big wig who causes the problem comes out smelling like a rose.