On Saturday, March 15, 2003, at 01:29 PM, Victoria Heller wrote:
Vicky Heller comments:
Pensions are a ticking time bomb in the public and private sectors.
Given the continuing decline in the markets, agreed.
Example: General Motors has 175,000 current employees, and 450,000 former
employees collecting pensions. One doesn't need much math to see that
this ratio can't continue forever. Right now, GM owes its pension fund
$12.7 billion.
This is the legacy of GM's excessive downsizing- rather than produce competitive products GM simply decided to shrink the company. They forgot that most of the workers they axed had vested pension benefits due upon retirement. Now their reaching retirement age, and GM is selling vehicles at break even prices just to try and cash flow their pension obligations. GM is in such fragile financial shape and so dependent on sales of big SUVs and pickups that gas prices of over $2/ gallon combined with the current recession will likely push the company into bankruptcy.
How many former Minneapolis employees are collecting, or waiting to
collect, pension benefits? A few months ago, a listmember posted that the
City currently has 6,230 full time employees (before any cuts.) I would
like to know how many people are either collecting now, or waiting in the
wings to collect City pensions.
Virtually all of those six thousand some city workers will be collecting a pension someday, and downsizing city government will do little to reduce that obligation.
Government entities must be required to disclose the WHOLE truth about their pension obligations - just like publicly traded companies.
Agreed.
There are 354 companies in the Fortune 500 that report pension data. 234
of them (66%) owe money to their pension funds....for example:
Exxon - $7.2 billion
Ford - $2.5 billion
In almost as bad a shape as GM. However, competitive small car line and having about 60% of the stock held by the Ford family and employees will probably save Ford from bankruptcy.
Delphi Automotive - $2.4 billion
Spun off from GM with the expected pension liability. Without the guarenteed market they had as a GM subsideriary they have to compete with about a dozen other producers of automotive electronics. None the less, they still make the best radio for a heavy truck even if Panasonic undercuts them on price.
Delta Airlines - $2.4 billion
Not bankrupt yet.
United Technologies - $2.3 billion
"Defense" contractor.
American Airlines - $1.9 billion
Wonder how bankruptcy court will treat the pensioners?
Pfizer - $1.3 billion Procter & Gamble - $1.1 billion Chevron, Texaco, Pharmacia, Goodyear, and Raytheon - $1 billion each
What is the corresponding number for Minneapolis - and how are we going to
fix the problem?
Minneapolis, many of the companies you mention, Amtrak, and the Postal Service are in similar straits. They are all large organizations with substantial obligations both to their employees and customers. In most cases downsizing only delays the fiscal crisis. The only long term fiscal solution for Minneapolis is to grow our way out of this problem- we need to become a city with high wage jobs and safe streets so citizens can invest in homes and businesses and increase the tax base. The current "solution" of reduced city services combined with rapidly rising taxes will only make our fiscal crisis worse as citizens disinvest and ultimately leave Minneapolis.
hanging on in Hawthorne,
Dyna Sluyter
Vicky Heller Cedar-Riverside and North Oaks
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