Reply to "President Obama's tax cuts/increases"

Ron, I think we covered that in a previous thread. GM and Ford tried to dump those retirement resposibilities by selling (spining-off) Delphi and Visteon. Then had to rebuy the white collar workforce or they would have gone under. In Canada Ford's white collar pensions are in a self sustaining trust fund. The trouble occurs when they use profits to pay pensions. Singer sewing machine was one early example, Tyco was another. There is a concern for Social Security as the forecast puts a heavy strain on the funds as the baby boomers will start retiring in BULK in 2010-2025 and there will be more retirees than people in the workforce.
SS and pensions were invented as a marketing tool because train engineeers were not retiring and putting travelers and cargo at risk. It was also a tool to attract the best employes. The whole scheme was good well into the the mid-80's when people started to retired earlier (or were offered packages to leave early) and lived longer: prior to that the average retiree only drew 2-3 years on their pension. Think back to your teens a 65 year old man was old, today we see people living a full life well into their 80's and many living to almost 100.
Auto sector employees used to draw 85% of their salaries when plants were shut down (in Canada the goverment has allowed these employees to go on unemployment when shut down occurs as part of the 'bailout' therefore reducing the drain on corporate funds). In the late 90's Jack Nasser (at Ford) tried to spin-off the assembly plants so they would be part of Visteon and the Company could walk away from grandfathered contracts and then just pay cars per unit (like parts).

Should companies walk away from their (let's call it unwritten - some written. I know I had a written contract when I started) social contracts total chaos would occur. What would happen to your employes if you called a meeting tomorow and told them starting today if you say with me I'll cut your pay by $10/hr. You'd loose half your workforce, hire newbees and be baysitting again. The numbers at Ford 3 years ago were that the labour cost per car were 5-8% of vehicle cost and marketing was $3500 to $4000 per unit. Profit on a basic Focus was $800 up to $15,000 on a Navigator. The companies have nickeled and dimed suppliers, now they will posture the governement for funds. Yeah I know the situation has changed with the crash but management have anticicipated a doomsday scenario (that why Ford was ready)

I dont quite agree with flushing pension responsibilites:company pension vs self managed 401K. There has to be a middle of the road situation. Perhaps a joint pension where the company participates in transferable 401K. Our fathers always told us:'be good to your employer and they will be good to you'. .Not so sure if that is still true, but in my heart I want to believe it still applies.

The auto manufactures are victims in this case. The true culprits in this CRASH are the Wall Street fund managers and insurance people who insured those funds.