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GM, Chrysler pension plans are $17B short

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GM, Chrysler pension plans are $17B short

David Shepardson / Detroit News Washington Bureau

Washington -- The pension plans of General Motors Co. and Chrysler Group LLC are underfunded by $17 billion combined and the automakers will need to make large payments to make up the shortfalls, according to a government report released Tuesday.

Chrysler's pension plans are underfunded by $3.4 billion, while GM faces a $13.6 billion shortfall, says the Government Accountability Office's report on automotive pension plans.

Chrysler's funding status was not known publicly before the GAO report; GM's shortfall was reported in February.

Chrysler's pension plans have $19.9 billion in assets and $23.3 billion in liabilities, the GAO said.

Chrysler will need to make payments through 2015 -- including $400 million this year and $930 million in 2013 and $1.25 billion in 2014. As of last year, Chrysler's plans covered about 250,000 people.

Chrysler did not dispute the calculations.

"Chrysler Group LLC is aggressively pursuing its financial goals as the company achieves financial viability," the Auburn Hills automaker said in a statement. "Our pursuit of these goals, which were outlined in detail on November 4, 2009, is on track and we fully expect to meet our obligations to our customers, business partners, employees, retirees and to the U.S. and Canadian taxpayers."

GM plans to make payments of $5.9 billion in 2013 and $6.4 billion in 2014. The Detroit firm's plans cover about 650,000 people.

Both pension plans could face larger funding requirements if either is deemed "at risk."

The report noted that the Pension Benefit Guaranty Corp. -- the government's insurer of private pensions -- is monitoring the fiscal health of 35 major automotive suppliers with combined pension shortfalls of $15 billion.

The PBGC has assumed pension plans covering 96,000 people at auto suppliers, taking on $6.5 billion in liabilities since last year.

The Treasury Department, which owns 61 percent of GM and 10 percent of Chrysler as part of an $81 billion federal bailout program, told the GAO that it believes the automakers will return to profitability, which will allow the government to gradually sell off its share in the companies.

From The Detroit News: http://www.detnews.com/article/20100407/AUTO01/4070337/1148/GM--Chrysler-pension-plans-are-$17B-short#ixzz0kQ28DW4o

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