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GM plight fuels angst for retirees
By Don Shilling
Retirees remain optimistic despite concerns, and one analyst says GM will file for bankruptcy protection if Congress doesn’t provide loans.
Dennis Hamm is worried that a General Motors bankruptcy could strip away his pension and health-care benefits, but he won’t let that take away his sense of humor.
“I do have serious concerns,” the 58-year-old General Motors retiree said. “I feel it will be OK. But if not, then I’ll come live with you.”
The Austintown resident laughed, but his concerns are real. Area residents who retired from GM’s Lordstown complex said this week that they are closely following news reports that GM faces bankruptcy without loans from Congress.
The retirees’ chief concerns are pensions and health care. Recent retirees receive $3,000 a month in pensions and health-care insurance for life.
Roy Weamer, 59, of Struthers said he thought he had his future figured out when he retired from the paint shop at the Lordstown plant in 2006. He received a pension and a $35,000 buyout after working 34 years at Lordstown.
“My financial planner said I was in good shape — until Wall Street happened,” he said.
Now, he’s dealing with losses in his investment accounts and a potential cut in his pension.
Weamer said he knows the federal Pension Benefit Guaranty Corp. guarantees pensions, but he’s also been told his benefits would be reduced if GM turns its plan over to the agency.
The PBGC says the maximum benefit from the agency for plans terminating next year is about $4,500 a month, but that is reduced for people who retire before age 65 and who want benefits for their spouse if they die.
For example, the maximum benefit for a 59-year-old retiree would be about $2,700, or $2,400 with benefits for the spouse.
Weamer has some backup income, however. While working at Lordstown, he also was a part-time driver for Gold Cross Limousine. He has kept that job in retirement.
Hamm said he has found his pension didn’t go as far as he had hoped. He has taken a seasonal job as a nighttime stock clerk at Kmart in Niles and is hoping to make the job permanent.
He went from being paid $33 an hour as a welder/repairman at the plant to $8 an hour at Kmart. Now, he wishes he had stayed on at the plant for a few more years.
Health care is another benefit the retirees have depended on.
Ralph Cascarelli of Boardman has been relying on the coverage since he retired from Lordstown 14 years ago. He’s now 69, so the GM insurance is secondary to Medicare, but it still is an important part of his retirement plans.
“We are in fear and hope GM doesn’t file for bankruptcy,” he said.
A bankruptcy filing almost certainly would end health-care coverage for retirees, said Erich Merkle, an analyst with Crowe Horwath, a consulting company in Grand Rapids, Mich.
Hamm said he hoped that health-care coverage could be retained because the United Auto Workers agreed last year to take over insurance for retirees with money from GM.
Merkle said, however, that the fund for retirees won’t be created until 2010 and GM hasn’t transferred money to it yet. With GM’s financial troubles, Merkle doubts that it would have money to put into the fund for some time.
Automakers, with support from dealers and suppliers, are lobbying Congress this week for loans to help them get through a financial crisis. GM has said it is burning through its cash reserves so quickly that it soon won’t have enough money to fund its daily operations.
Merkle said that GM will file for bankruptcy in December or January if Congress doesn’t provide loans.
“There’s no way they’ll make it without assistance,” he said.
GM has announced cost-cutting measures but has said it is still losing money because of a drastic slowdown in vehicle sales. It also has been unable to loan money from private sources because credit markets are frozen.
Although this worries retirees, they remain optimistic.
“They are a big enough corporation that they will figure something out,” Cascarelli said.
Weamer said he thinks GM “can come through this, but it will be on shaky ground for a while.”
What if they are wrong?
“They promised me a future,” Hamm said. “If I lose my health care and my pension, I’ll be living in a refrigerator box somewhere.”
Then he laughed.
“GM will make it,” he said. “They are going to pull through.”
shilling@vindy.com
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Comments
Generous union demanded wages and benefits is killing GM and the union refuses to take further concessions to keep the company viable. Sounds like the end game is already decided. The taxpayers yet again shouldn't be expected to subsidize union caused overly generous wages and benefits. Taxpayers who don't have anywhere near this kind of early retirement and fully funded pension and healthcare benefits.
I have an immediate family member who is a GM retiree. They retired early because of being young. Started there at age 24, retired after 33 years. Retired from being salaried supervisor making big money to a big pension with big benefits. Living high on the hog for a long, long time. Spending money left and right like money just grows on trees. Oh there are investments, but with the way the stock market is, they aren't how they could be. NOW this person is living in the REAL WORLD, not the GM WORLD. And oh what a shock it is to them. They actually have to have a BUDGET. They actually have to plan for things, have to think before they buy. They can't just buy anything and everything they want. There used to be subtle laughs when I said things like "No I can't afford it" or "No I don't have the money for that". They used to flippantly pull out a credit card and declare "Oh I can pay" which always made you feel like trash. NOW times have changed. How they mighty have fallen. I am no longer put in the position of having to explain that I cannot afford to go to this outrageously expensive restaurant or that I can't afford to buy 15 relative $750 to $1000 worth of Christmas present each.
Gee he only makes $8.00 an hour stocking shelves,well that explains why hunting for a seasonal job has been so hard.These baby boomers and GM workers are greedy people because like alot of jobs in the area they want to work til they are 90.Step aside and let other people have a chance.Hopefully now that we have a younger president in that will give us younger people a fighting chance.Besides these companies that hire these people should see that there already loaded and hire others that really need the money to survive.
These retirees should be complaining to the tope execs! GM decided to fly their CEO in their 25 million dollar corprate jet to DC for the talks. It cost them 20 thousand dollars for the trip, instead of like $500 first class on a regular plane. You see they really, honestly only care about padding their own pockets. They want the bailout money without cutting any perks. Something has got to give at the top for the average worker to get their cut.
I do think these retirees need to start paying so much more then 10 dollars a month for their health insurance! Get with the times, everyone pays more then that once they retire. Plus it's called go out and get a job! You are still young, and can make money! So quit being so lazy!
I lost my job last year that I had worked at for 18 years, it was a labor job, i was making $16.00 an hour and now can only find a job (which I am working for at $7.00). I have a family of 5 and my wife does work. I could not get into GM when I lost my job, because I didn't know anyone that worked there. But my neighbor and his wife both got a job there and they have no kids. I also lost my health care when my job was lost, so now my wife has to carry it and we have to pay alot for it because we have a family of 5. We have really learned to watch every penny. Thank God we did not live beyond our means or we would loose our home where we have lived for 12 years. We have gotten no help, my mill was not bailed out. We have struggled over the last year, to pay our bills, ( the basics ,, gas, electric, water, phones, car insurance and food for our 3 boys. We have learned to go without alot of things, its not been easy but we manage.. We have not ate out in over a year, no movies, no extras for the kids or us.. I don't want this to happen to anyone, but it is so hard to hear all these people boo hoo over their high paying jobs, I lost mine, and its not easy,, but you just learn to manage.. I have even been looking for a second job so I can work two jobs but that even hard to find, I am 55 years old and at that age it is hard to find a job to start at the wage my other job was but I am not sitting on my duff, I figure a job is better than no job.. Wake up Gm, start learning to live without alot now, because the time will come when you will have to learn the hard way. I would of loved to worked for the 14.00 you are paying now, I would of been thankful, but you guys make it so hard to be hired, you have to know someone and go throguh the lottery system, forget about just hiring hard working people. You have to pass your piece of the pie to someone you know,, I don't think its fair to bail you out, no one bailed my company out, and if we bail you out who will be next in line,, than next, than next it will never end.. I feel for you all but fair is fair,,
3023, WELL PUT!! I TOO AM LAID OFF AN LOOKING FOR WORK STILL, STILL NO ONE WANTS TO HELP OUT MY PLANT! YOU ARE RIGHT,WHATS FAIR IS FAIR!!
xfilesx: let me get this straight.
you have an immediate family member (like a brother or something) who worked at gm for 33 years and is now retired.
when you went out to dinner with him, he often picked up the tab. and just to piss you off, he lavished you and the rest of his family with extravagant gifts at christmas. do i have it right so far?
but now he's hurting because of the gm crisis and that makes you happy. well i'm with you, buddy. i'm glad he's going under because he sounds like a real bastard to me, spending as much as $1000 each for presents. the man's a monster!
let's all hope he ends up on some bread line somewhere. i'm going to church to pray for it right now.
um, you did say immediate family member, didn't you?
All I can say here is that GM retiree's should plan for retirement just like the rest of us. If they didn't build up their savings accounts, CD's, stock investments and retirement funds, shame on them...I feel no pity. If you just watched your pension fund grow and spent everything else, its your own fault your stressing out now.
I know I support both an employee/employer funded 401k and separate retirement fund I contribute into myself. Plus your basic CD's, savings accounts and various investments. I hope this is the responsible path to a secure retirement when my day comes.
I'm sure there are GM retiree's and soon to be retiree's who didn't just depend on their pension to survive in retirement. Why doesn't the Vindy highlight one of those guys instead of the always complaining always worried guy? I for one would like to see one the hard working, plan ahead, optimistic GM employees. It would retore some faith that not all GM workers are naive and live only as fat cats.
Id, pay attention to what X was saying...the GM worker was rubbing his nose in it cause he was far better off, he could afford better vacations, afford to give better gifts, being a player at restaurants....I know the same kind of people, they traveled to Hawaii, New York, Italy, Spain and ONLY stayed at 5 star hotels, we are not talking Holiday Inn here. AND they loved every minute cause GM was footing the bill. In other words, they made the rest of us look and feel inadequate, as far as providing the finer things that we only wished we could do. Even tho we worked just as hard at other things.
WOW...I guess I didn't realize the disdain for the GM worker ran so deep. Its true the wages and benefits are good at GM. Its also true that it was a progressive improvement, after many collective bargaining agreements. Everyone deserves to retire with a decent pension...and not to lose it after they are retired.
I never see anything mentioned about the generosity of these workers. GM Packard workers gave over ONE MILLION dollars a year to the United Way Agencies, helping many needy families in the area. This was in addition to many other charities done in individual plants. The adoption of at least 15 families for Thanksgiving and Christmas by the workers in the battery line, providing food and presents, for example.
While it may be hard for some to accept that the GM workers are well paid, and have good benefits, I would say be THANKFUL for all that they have contributed to our community!
clayor, is there any room in your mind for the possibility that xfiles' immediate family member was just being generous and not showy at all?
years ago i knew a guy who hit the lottery for $6 million. after that, he always paid. not to show off or rub his friends' noses in it but because he was a good guy. he felt his good fortune was all of theirs.
could jealousy skew a person's perception of reality?
and miss marylou, thank you for being the voice of reason. the people at lordstown have been involved in toys for tots, make-a-wish foundation, american cancer society and many many other charities since the beginning, donating both time and money to all of them. and i doubt anyone did it for anything but the right reason.
Key sentence, Id, I knew a guy who hit the lottery for 6 million, I don't think that was the guy X was talking about. THAT is a whole other issue. You missed X's point. Regardless, Happy Thanksgiving, everyone!
Id (would that be short for idiot?), you didn't read my post except quickly, right? My point was my GM worker family member was "too good" to go to a regular restaurant where the rest of us could afford (and NO, he was NOT picking up the tab). And our measly present were never good enough for him and his family because he could buy better. The phrase "it's the thought that counts" never took hold in HIS mind. You see, he never came from humble people. My people were poor and learned to appreciate all we had. We worked hard for what we had which was not much and when it was received, we were thankful. He has a mind of "entitlement" that was further grown at GM. He has no concept of reality. And for you and Marylou's comments on all GM did/does for charity, they are NOT the only ones who do so. Sure, it's easy for GM workers to do so because they make big bucks. Let's hear it for the regular Joe who donates his time and money when he works a normal job and has to "make do". Let's hear it for the cop, the firefighter, the teacher, the nurse, the cashier, the pizza maker, the painter, the landscaper, the garbage collector, the disabled, and even the POOR who give to the poor. THEY are the true heroes.
OK let's see, you spend $100,000K of your own hard earned money to open your business, you pay employees. You lose money for two years, you go bankrupt and then out of business, your employees have no jobs, pensions, or benefits. If you make a profit you stay open and they have jobs, pensions, and benefits.
In fantasy land you open the company, over pay the unskilled, uneducated union laborers, pay yourself millions of dollars, fly on corporate jets and lose money, and the federal capitalism government fairy waves a wand giving you someone else's money (IT IS SOMEONE ELSE'S MONEY! MINE...). The other people (someone else's money, mine) live lesser lives making $10, $12, maybe $19 dollars an hour so you can go on being a failure and living a comfortable life.That's what a nonprofitable business is A FAILURE, and should not be paying pensions and benefits to it's employees with others tax dollars.
Here is a crazy idea. Let the UAW get their ranks and retirees to put $15 an hour into buying the company and buy it. If they are competitive and produce a good product for less than the competition they will get the profits and still have jobs and pensions. However if they are overpaid leaches who believe it's normal to make $28.00 dollars an hour, retire before 65 years old, are not as capable as they think and will not be able to get a $9.00 an hour job because they have no training, skills and don't know how to operate a business computer, they will lose their rear ends. This is the world of the business owner and it's employees.This is America. Being paid for not being productive is a socialistic redistribution of wealth, MY WEALTH!
It is time for the for the UAW and it's members to come to the realization that GM cannot possibly continue to pay the millions of retirees wages and benefits at their current rate (it is physically impossible if you do the math) without the union and retirees accepting deep cuts in their retirement pay and benefits (even with the government bailing them out). It just will not work. Even with a proactive new management staff with innovative ideas and major cuts it cannot be saved without reducing what is going out the window before a single car is purchased.
The GM bean counters failed miserably to adequately project future profit and loss margins vs. increasing expenditures and now the retiree's will be forced to pay the price. The retirees must realize that reduced pay rates and benefits is better then none at all. If they allow their pensions and benefits to be reduced they will still be in line with what other profiting companies pay their retirees at normal retirement ages.
HEY MAYBE HONDA'S HIRING THEIR DOING WELL????
Let me just say this XYTOWN, get yourself a teaching degree and spend one day in an inner city school trying to teach,then come back here and say teachers are over paid.GM workers as well, twisting your wrists to get a screw in right is nothing compared to trying to get a kid to think and be productive, try it sometime, your opinion will change in an instant.
Proper spelling Xytown.....they're doing well. Thank a teacher.
If any of you think any of the people I mentioned above are over paid (cop, firefighter, teacher, nurse) I would like to see you do their job for one week. ONE DAY actually. you would not last. All three professions deal with people at their worst. You think you see people acting rude or ignorant? Try having to serve a summons, break up a domestic disturbance, pull over a drunk driver, break up a bar fight, or GOD FORBID, be in the midst of a shoot out. Try going into a burning building to rescue someone when everyone else is running out, not knowing if the owner of that building has been secretly stashing fireworks in the basement or if the scene is really an arson fire, or if your equipment will TODAY chose to malfunction. In these professions, try kissing your family good-bye each day not knowing if this is the last time. Or try going to work each day surrounded by blood, urine, feces, sputum, mucus, pus, gangrene, and let us not forget the possibility of infection such as VRE, MRSA, EBSL, TB, HIV, AIDS, C-DIFF, bacterial pneumonia, shingles, botulism, staph, encephalitis, Q-fever, RSV, etc. Wash your hands until they are so dry and red that any lotion with any type of fragrance kills them in pain. Leave your shoes and clothes at the door for precaution that you may have brought home one of the above mentioned infections or one not mentioned because your best attempts did not work or the patient LIED (which happens daily) or they just didn't know or the test was not back. Wash your uniform in a strong solution to kill as much bacteria as possible. And in all of these positions, deal with the public who not only think you are there to jump at any given second, but are there to heap any and all abuse upon. Verbal abuse is common, physical threats happen, stalking and sometimes actual physical harm occurs. In these jobs you are expected to perform miracles, soothe egos and hurt feelings, put everyone else before yourself including your quitting time, lunch time and break time (there IS NO break time or quitting time) AND if you do NOT, the public has the power to have you reprimanded, put on leave, or even fired. They can ruin your career for kicks. It can, does, and has happened. Sooooooo, how many of you want to be a cop, firefighter or nurse now? Anyone who thinks I am exaggerating is as deluded as the GM worker.
Marylou (Anonymous) on 11/26/08
WOW...I guess I didn't realize the
disdain for the GM worker ran so deep.
Mary Lou, it's not disdain, it's bitter jealousy. I don't work for GM myself - never have, never wanted to. But there's an element both in this Valley, and especially here on the forums, that feels that if they don't have or get something, nobody else deserves it. If you make a dollar more than they do, even for a different job, they say you're overpaid. If you get a benefit they don't, they say you have "Cadillac Benefits." You see, it's much easier to gripe and moan about someone else's good wages than it is to go get yourself a similar paying job. If you convince yourself that you'll never get one of those jobs, because you have to "know somebody," that's much easier than being shot down for applying for a job you think you "deserve" but nobody else thinks you're qualified or prepared in any way for.
Its true the wages and benefits are
good at GM. Its also true that it
was a progressive improvement, after
many collective bargaining agreements.
Everyone deserves to retire with a
decent pension...and not to lose it
after they are retired.
Yes. If you've worked somewhere your entire life, and throughout they've promised, in writing, to fund your retirement after you've met their criteria, it should be a crime when that contract is broken. Instead, the lazy slobs who couldn't be bothered getting a job with a retirement package dance in the streets when a company reneges on its obligation to its retirees, because the lazy slobs don't get that benefit themselves, so nobody deserves it.
Clayor:
Thanks for proof reading my comments, no spell check for us slow leeerners makes things daffincult. I will use gooder english in the future :)
Ironically I worked at GM Lordstown after high school (summer help) and I am now a professor with a doctrate in L.A. and spent my early years teaching in Compton.
You have totally misinterpreted my comments.
Nuff said....
I spent 11 years in the UAW at a plant similar to Lordstown in another state, and could write a book on the ridiculous ways of both labor and management.
GM, and particularly Lordstown should be glad they lasted this long given their bloated compensation (for current workers and retirees), work rules (it's not my job!, except if overtime was involved, then you grieve to get free $$) and a product the market obviously does not want, given their shrinking market share.
I watched many friends and family members lose their jobs in steel related industries 30 years ago both in Youngstown and Pittsburgh. The government/taxpayers did not bail those companies out, and they should not bail out inefficient auto makers either. Anyone who worked there 30 years and made that kind of money should not be losing their home or even concerned about money, if they lived within their means instead of having jet skis and snowmobiles.
The difference between Pittsburgh and Youngstown is that the former adapted to a changing environment with new industries, and the job/real estate market shows it.
BTW- I lost my job over 20 years ago when the plant closed, and it was the best thing that ever happened to me because I knew it would not last. (Triple time on a weekend/holiday??) I used the money I made to start my own business and never looked back!
Clayor:
Proper spelling clayor..... even though (not tho) we worked just as hard at other things (see 11/26/08 comment). Thank a professor...
Touche...Xytown (without the diacritical mark because I don't think I have one)! I thought you were knocking teachers and thinking they were over paid I guess you know better, my mistake!
Thomas, I can remember when the Sheet & Tube closed, people were in shock, the shock rippled throughout the Valley, so many people were just out there....nobody cared, nobody helped, people waited and hoped the mills would re-open, but they never did. In the meantime GM, Packard thrived, nobody from there cared one iota. If they did, they never helped. There was never a talk about bailout, there was never a talk about anything, it just happened, over and done with. I think, we all, unless we worked GM, were affected by that in one way or another.So could this be the "what goes around, comes around"? If so, too bad, been there done that, get a grip, deal with it. A lot of us did AND survived.
well, oldmangrump, you will be paying the bill as will the rest of us. If gm files bankruptcy, the will dump the pensions of all the retirees on the PGTC. So everyone needs to get their head out of their, when it comes to think that we won't bail out gm, ford or chrysler. It will be just like the Airlines, if one goes so will the other. We Americans are to stupid to protect our jobs as Europe does or Asia.
Not only will we be paying for the pensions, we will pay for the unemployment of millions of workers tied to the automotive industry, steel workers, truck drivers, cooks, etc. It's not about Gm, Ford, or Chrysler.
So figure it out how far will 25 billion go? I don't advocate just giving them the money, like Bush and his
crony Paulson had with the banks,and financial companys.
First executive pay should be no more than 10 times the lowest paid employee. Second this money will be used to stabilize the company, and create jobs here in the U.S.
The next step is to put a 20% duty on everything that comes into this country just like the rest of the world does.
Also tax breaks to companys that create Good paying jobs here, and a massive import dutie for company that want to move our work overseas.
If we as Americans do not start taking care of our middle class. There will be no middle class left.
you're right Grump, we need to bailout to cover the exec"s pensions. Now they are going to carpool to Washington for their next meeting. Do they think we are all idiots?? But, mark my words, a bailout is coming, and I bet everyobe will have a new car.
Hey XFiles - I agree with you completely. We have a neighbor who worked for GM for years and recently retired. He rubs our noses in it almost daily. Gambles thousands of dollars in casinos, travels with the "little woman" who incidently, rarely worked a day in her life. Yet they had the nerve to remind us that we need home repairs like the one's they are having done. It's sickening to watch them toss money around like it's growing on trees. Jealous? Darn right I am. We work our tails off and still live paycheck to paycheck. I'm not going to lose a minute of sleep over this yo-yo possibly losing some of his benefits - maybe the "little woman" might actually have to find a (gasp) job.