Jump to content
  • Greetings Guest!

    CheersandGears.com was founded in 2001 and is one of the oldest continuously operating automotive forums out there.  Come see why we have users who visit nearly every day for the past 16+ years. Signup is fast and free, or you can opt for a premium subscription to view the site ad-free.

Oracle of Delphi

GM proposes 401(k)-styled pensions for new hires

Recommended Posts


September 19, 2007 - 5:40 am EST

UPDATED: 9/19/07 10:11 p.m. EDT

DETROIT (Reuters) - General Motors for the first time is proposing a 401(k)-style retirement plan for new UAW hires instead of traditional pensions, Bloomberg News reported today on its Web site, citing people with knowledge of the talks.

GM also has proposed freezing cost-of-living raises to help pay for a union-run fund that would take responsibility for retiree health care, the report said.

Meanwhile, GM and the UAW recessed their contract negotiations this evening after another full day of talks. It was the fifth day of bargaining since the previous four-year agreement expired at day's end Friday.

The parties gave no update of the talks, as has been their practice. They resume negotiations Thursday morning.

Moving to a 401(k) kind of pension program would make sense if GM and the UAW agree to a new two-tier wage system for new hires.

But like any contract negotiation, all proposals remain subject to more negotiation - and ultimately must be ratified by the rank-and-file workers. Neither the UAW nor GM has officially commented on specific bargaining issues.

Bloomberg said union workers are guaranteed a set yearly payout, which is $36,000 for current GM retirees. A 401(k) plan, also known as a defined contribution plan, typically allows employees to match a portion of company payments and control their own long-term pension investments. Retirement pay is then determined by the amount of contributions and the investment performance of the fund.

Many employers are moving toward such plans. Bloomberg, citing Pension Benefit Guaranty Corp. statistics, said that from 1986 to 2004, 101,000 single-employer plans in the U.S. ended their defined-benefit programs. By 2004, only 30,000 defined-benefit pension plans existed, down 73 percent from 112,000 plans in 1986, Bloomberg said.

After breaking off talks at around 9 p.m on Tuesday, GM and UAW negotiators returned to the bargaining table on Wednesday morning.

Since Monday, bargaining has shifted into a deliberative and slower-moving phase as both sides stepped away from the kind of round-the-clock sessions that the automakers and the union have used in the past to hasten a deal.

UAW President Ron Gettelfinger and Vice President Cal Rapson, who are leading the union negotiations with GM, have cautioned that the union would set a firm deadline for talks to conclude if progress stalls. GM employees, meantime, continue to report to work as usual.

David Barkholz contributed to this report

Share this post

Link to post
Share on other sites

$36k / year is a sweet deal as guaranteed retirement income. No wonder the UAW membership continues to line up with their hands out. Unfortunately for them, those days are over. I continue to be pessimisic about the outcome of the negotiations. I wonder if yet another contract term of Toyota drubbing won't be required to enlighten these buffoons.

Share this post

Link to post
Share on other sites

Your content will need to be approved by a moderator

You are commenting as a guest. If you have an account, please sign in.
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

About us

CheersandGears.com - Founded 2001

We ♥ Cars

Get in touch

Follow us

Recent tweets



Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.