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No its not false. PBGC Director Praises Pension Transfer from Delphi to GM “This will have an immediate and positive impact on PBGC’s funded status well in excess of $1 billion. This transfer is exactly what we have been urging all along and we are very pleased with this result. PBGC Moves to Protect Pensions at New United Motor Manufacturing The New United Motor Manufacturing Inc. / UAW Hourly Defined Benefit Pension Plan is 55 percent funded, with assets of $161 million to cover benefit liabilities of $292 million, according to PBGC estimates. The agency expects to cover $126 million of the $131 million shortfall. PBGC To Assume Delphi Pension Plans The PBGC expects to be responsible for about $4 billion of the plan's shortfall of nearly $4.4 billion. The PBGC expects to be responsible for about $2.2 billion of its estimated $2.6 billion in underfunding. In addition, the agency will be responsible for $50 million in underfunding of four smaller Delphi plans with 2,000 participants. The PBGC will pay pension benefits up to the limits set by law.
if you are going to post that others are wrong, please have something to back it up. I dont talk about things I dont know about..
G.M. spun off Delphi as an independent company a decade ago. Delphi Corp. has been in bankruptcy for over four years and that's when the PBGC took over the Delphi Pensions. GM just recently agreed to buy parts of Delphi back.
Last edited by Wayland Woman; 04-21-2010 at 07:44 PM..
GM has payed back all [b]loans[/i] which is exactly what the OP says. Yes, the equity stake will still be handled by the IPO but $40 billion is a very, very conservative market cap for GM. Currently Toyota is at $144 billion even during a recession and just four years ago GM's market cap was at $85 billion even with the pension and debt liabilities which are now gone due to bankruptcy.
Delphi Corp. has been in bankruptcy for over four years and that's when the PBGC took over the Delphi Pensions. GM just recently agreed to buy parts of Delphi and assume the responsiblity of the Delphi workers pensions that the PBGC has been covering. What is the down side of that? Sounds like a win-win for the tax payers.
GM piled their pension plans onto Delphi while they were in bankruptcy, moving the liabilities to PBGC Pensions GM Dumped On Delphi Now In Peril | The Truth About Cars Delphi Plan-specific FAQs (PBGC.gov) Q: Delphi was created in 1999 as a spin-off from General Motors. Why doesn't GM take back the pension plans? A: Since Delphi entered bankruptcy protection in 2005, the PBGC has worked with Delphi, GM and other stakeholders to keep all the pension plans ongoing or to have them assumed by GM. In 2008, GM did assume responsibility for a portion of the Delphi hourly pension plan, and was expected to take back the entire hourly plan. However, GM itself reorganized in bankruptcy earlier this year and now states it is unable to afford the additional financial burden of the Delphi pensions.
No one is arguing that Delphi staying is business is good/bad, the discussion is who pays what... (btw, its not a win-win for taxpayers, if Delphi isnt supplying parts, their competitor will. After all, the parts have to come from somewhere)
In addition, the PBGC will ONLY pay limits set by law, which was much lower than originally agreed upon. The former employees, (and the stock holders) got screwed, while the unions, government, and bondholders walk with it all.
GM piled their pension plans onto Delphi while they were in bankruptcy, moving the liabilities to PBGC Pensions GM Dumped On Delphi Now In Peril | The Truth About Cars Delphi Plan-specific FAQs (PBGC.gov) Q: Delphi was created in 1999 as a spin-off from General Motors. Why doesn't GM take back the pension plans? A: Since Delphi entered bankruptcy protection in 2005, the PBGC has worked with Delphi, GM and other stakeholders to keep all the pension plans ongoing or to have them assumed by GM. In 2008, GM did assume responsibility for a portion of the Delphi hourly pension plan, and was expected to take back the entire hourly plan. However, GM itself reorganized in bankruptcy earlier this year and now states it is unable to afford the additional financial burden of the Delphi pensions.
No one is arguing that Delphi staying is business is good/bad, the discussion is who pays what... (btw, its not a win-win for taxpayers, if Delphi isnt supplying parts, their competitor will. After all, the parts have to come from somewhere)
In addition, the PBGC will ONLY pay limits set by law, which was much lower than originally agreed upon. The former employees, (and the stock holders) got screwed, while the unions, government, and bondholders walk with it all.
Aren't you forgetting that the federal bankruptcy court has to review and approve everything that G.M does including deals to acquire Delphi? Take it up with them if federal law doesn't require someone purchasing the assets of a defunct business to also take on the debt load of the defunct company's pensions.
Aren't you forgetting that the federal bankruptcy court has to review and approve everything that G.M does including deals to acquire Delphi? Take it up with them if federal law doesn't require someone purchasing the assets of a defunct business to also take on the debt load of the defunct company's pensions.
Not forgetting that at all. Nothing limits companies from buying up BK companies, what would give you the impression I believed this to be true? We are discussing the pensions and who will pay for them, not discussing rules of bankruptcy court.
Not forgetting that at all. Nothing limits companies from buying up BK companies, what would give you the impression I believed this to be true? We are discussing the pensions and who will pay for them, not discussing rules of bankruptcy court.
Not exactly. We were talking about the GM bailout and THEIR pensioners and you brought Delphi into the mix after you said that GM was going to dump GM pension responsibilities on the tax payers. I disagree and say that Delphi pensioners are not, and haven't been, GM's responsibly. The only way that that GM pensioners will be taken over by PBGC is if the bailout fails and they end up going through another bankruptcy.
This is definitely good news. It's hard to predict, but if things continue to go well for GM we might be able to start liquidating our $45 billion equity position, maybe even at a profit.
Won't that burn the conservatives up! I know they were all hoping that the money would be gone forever.
Not exactly. We were talking about the GM bailout and THEIR pensioners and you brought Delphi into the mix after you said that GM was going to dump GM pension responsibilities on the tax payers. I disagree and say that Delphi pensioners are not, and haven't been, GM's responsibly. The only way that that GM pensioners will be taken over by PBGC is if the bailout fails and they end up going through another bankruptcy.
GM put their pension liabilities IN WITH DELPHI's... Many of them will be picked up and covered by PBGC. While GM might rebuy Delphi, there is nothing to force them to take the liabilities with the purchase. After all, they also split GM into two companies leaving the liabilities with company A, and taking the assets into company B.
Its not like they dont have a history of doing this..
The forthcoming Chevrolet Cruze is going to be the most important car GM has made in decades, since nobody is going to pay $35,000 or more for a tiny Obamamobile named the Chevy Volt.
Unless the Cruze becomes one of the top five selling cars in America, GM is going to remain ideep trouble, and the new CAFE standards will undoubtedly be their death knell, since there's virtually no chance that they'll be able to comply with those boneheaded new mileage requirements.
Unless they can somehow build a Silverado that gets 25 MPG, that is.....
GM received $52 billion from the U.S. government and $9.5 billion from the Canadian and Ontario governments starting in 2008. GM wiped out most of its staggering $95 billion debt in bankruptcy.
GM Summary
GM is still Government Motors.
The US Government converted $45.3 billion in loans to a 70% ownership position.
The Canadian Government converted an $8.1 billion stake into 12% ownership.
GM lost $3.4 billion in the 4th quarter of 2009.
GM still has $15 billion in debt.
GM has $27 billion in unfunded pension liabilities.
Until GM IPOs we will not know an approximation of taxpayer losses. Moreover, those losses do not include the pension time bomb.
With GM still losing money on top of all those issues why did GM repay TARP? The likely answer is to get out from under TARP restrictions on CEO and executive pay.
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