GM_Ford_Chrysler Bailout

Wow! Nancy and Harry are on TV with the rest of the Democrat leadership (Chris, Barney and company) proposing to give your and my money to the "Big 3" so that the Democrats can continue get those UAW and "green" votes! What a wonderful country, a country where elected officials can take my money and give it to the people that vote for them. The power to do this must be written in the Constitution in invisible ink!

PS I have a new Dodge Ram and I still believe that Chapter 11 is the best answer. I did hear a good idea, have the federal government guarantee the warranties on "Big 3" vehicles.

Am I not correct in that their pensions are protected regardless of the big 3 going under?

Interesting website:

http://www.uaw.org/index.cfm

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Originally Posted by Thomas D

Am I not correct in that their pensions are protected regardless of the big 3 going under?

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Yes, pensions are protected by the Pension Benefit Guaranty Corporation (PBGC) but only to a maximum of $54K per year for a worker retiring at 65 ($24K per year if a UAW worker retired at 55).

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Operations are financed by insurance premiums set by Congress and paid by sponsors of defined benefit plans, investment income, assets from pension plans trusteed by PBGC, and recoveries from the companies formerly responsible for the plans.

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Under Chapter 11, "recoveries from the companies formerly responsible for the plans" may place some burden on the taxpayer. I am not sure about health benefits.

Part of the testimony was that 40% of the UAW retirees are under 65 yrs old, and that their medical coverage would be eliminated. Now I just retired at 62 and the company still pays the major part of my med ins. However, I have made sure that I have the funds available to pay it if the company decides not to fund it any longer. Obviously, most of these people did not. More cradle to grave mentality.

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Originally Posted by Thomas D

Part of the testimony was that 40% of the UAW retirees are under 65 yrs old, and that their medical coverage would be eliminated.

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As a cancer reseacher at a major university, the NIH refused to renew my grant because the discoveries "would interfer with drug company profits." Since I was only 61 and it takes 7 - 10 years to establish a new research program, I was effectively forced into retirement. Since I am not eligible for Medicare, I have to pay for my medical and dental insurance. Why should I be forced to pay for a UAW retiree's health care?

Unfortunately, bailing out the auto industry is nothing more than pandering to the special interests for votes.

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Originally Posted by Paul Johnson

Under Chapter 11, "recoveries from the companies formerly responsible for the plans" may place some burden on the taxpayer. I am not sure about health benefits.

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When Bethlehem Steel was bought out, that was the big deal: that retirees health benefits would be curtailed. After 65, they would have Medicare just like everyone else, but not nearly as luxurious as the company plan would have been. Nobody could afford to buy what was left of the company if they had to absorb the retirees' benefits.

The same is occurring with employees of Lucent Technologies & it's spin-off Agere, Inc.

I believe, in situations like this, Medicare pays first anyway and the company plan picks up after that. So, the cost to Medicare wouldn't be affected anyway.

Aren't most of the long-term warranties today actually an "insurance" program? If so, wouldn't that keep the parts manufacturers in business? Dealership service departments could become "specialty" service shops since they have the mechanics already trained to work on the existing vehicles of those particular brands.

Has anybody thought of merging the Big 3 into one company, and cutting down on the # of models offered? Taking the best from each of them. And separating the trucks (for agricultural use) from the rest of the CAFE regs? There is plenty of duplication of similar models between the Big 3.

My son works for Toyota, and they are sticklers for quality right down to the sales force. If you pick up a new car for T, and it has even a smudge on the exterior, the salesperson gets a zero for customer satisfaction.

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Originally Posted by Gerry Clinchy

I believe, in situations like this, Medicare pays first anyway and the company plan picks up after that. So, the cost to Medicare wouldn't be affected anyway.


Has anybody thought of merging the Big 3 into one company, and cutting down on the # of models offered? Taking the best from each of them. And separating the trucks (for agricultural use) from the rest of the CAFE regs? There is plenty of duplication of similar models between the Big 3.

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Isn't every auto worker over 65 on medicare? What they get in their insurance benefit I believe is a supplemental insurance to help pick up things that medicare doesn't cover. Most of the retirees I know carry their own supplemental plans.

The merger part, that is part of what GM and Chrysler had in mind. In the current climate I don't know where the financing for a merger would come from.

The thing about the light trucks not being suitable for agriculture use I don't understand at all. I have seen some statements here, but I have never heard anyone here in South Dakota complain about their trucks being too light and under powered because of CAFE. But they aren't driving 150's and 1500's. Plenty of 250's, 350's, 2500's and 3500's. But then again, I'm not a farmer, I just run across one here and there.:confused:

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Originally Posted by Buzz

Isn't every auto worker over 65 on medicare? What they get in their insurance benefit I believe is a supplemental insurance to help pick up things that medicare doesn't cover. Most of the retirees I know carry their own supplemental plans.

So, one might have to carry workers 62 or older for the remaining years till 65. If they are much younger than that, uh, that might mean they'd have to get a part-time job to maintain similar benefits until at least age 62. Still would be costly, but not as costly as footing the bill for luxury benefits for everybody for the rest of their lives.

The merger part, that is part of what GM and Chrysler had in mind. In the current climate I don't know where the financing for a merger would come from.

Have not other companies merged without financing? If the companies really saw this as a means of survival (if they really want to survive) could they not begin making large cuts in upper end compensation and use that cash to self-fund merger costs? Might be able to share those company jets and sell off the over-skill as well.

It also occurs to me that there must be small "airlines" that could provide private jets for these companies on an as-needed basis. Or is that actually the situation now? Rent-A-Jet :D

The thing about the light trucks not being suitable for agriculture use I don't understand at all. I have seen some statements here, but I have never heard anyone here in South Dakota complain about their trucks being too light and under powered because of CAFE. But they aren't driving 150's and 1500's. Plenty of 250's, 350's, 2500's and 3500's. But then again, I'm not a farmer, I just run across one here and there.:confused:

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WRT to the trucks, supposedly the F150 is the most popular vehicle around. Suspect that not all of them are owned by farmers.

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Originally Posted by Buzz

Isn't every auto worker over 65 on medicare? What they get in their insurance benefit I believe is a supplemental insurance to help pick up things that medicare doesn't cover. Most of the retirees I know carry their own supplemental plans

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When I retired from the big kite factory they carried my wife & I for medical, dental & eyewear. None of them cadillac plans but sufficient. When each of us turned 65 - dental & eyewear disappeared. The company offered a Supplement which quickly became cost prohibitive. We self insure now, & the prescription drug benefit has helped drive costs down.

On Medicare the system works this way - care provider submits a bill if they accept Medicare - Medicare allows what their schedule shows, usually between 30-40% of total bill. After one has satisfied the deductible, Medicare pays 80% & you pay 20%. Provider writes off the remainder. So in fact, those on Medicare are paying for 6-8% of an original total bill. It is a strong case for self insuring.

Glasses happen every 2 years. Teeth get cleaned yearly, bad ones get pulled, (down to 16 now) & some day will have false teeth. I can still chew more than I should eat. Forget about implants - you can eat a lot of soup for $2,500 a shot.

There is too big a deal being made about these supplements.