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Old 12-11-2012, 10:06 AM
 
6 posts, read 8,242 times
Reputation: 20

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Quote:
Originally Posted by Ted Bear View Post
While on the surface, the DB might be a nice cherry, certain things have to happen for you to get it: like the company needs, in many cases, to survive.

DC is a little more flexible. It tends to be more 'market related' in terms of the benefit, but you can run and hide if you so desire. With DB, that is not an option...as the GM guys, who probably thought they were set for life, found out.

Your analogy of 'bird in the hand' is completely correct. The 'other' guy is always doing great (like all of the people who owned Apple shares), until he is not......(like all of the people who owned Apple and just saw $200/share of their money vaporize).

Slow and steady wins the retirement race....plus you can sleep at night. There is a lot to be said for that.
Thanks for that. I was really regretting it (it is a very large stable company, all benefits accrued so far are guaranteed/insured etc. so I suspect I've shorted myself as we only get 5% company contribution into the DC). Of course GM was also thought of as stable. So you really never can know what can happen so far off in the future which was my thinking when I chose DC all those years ago.
Thanks for your opinion.
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Old 12-11-2012, 10:59 AM
 
344 posts, read 382,336 times
Reputation: 318
Quote:
Originally Posted by jimj View Post
You're right, you should save up for retirement like by investing in bonds maybe take advantage of an employee stock ownership program (ESOP). Yep, bonds are the safe way to plan for retirement! Oh wait, I forgot something. Not only are these retirees losing a lot of their pensions but they (along with many other non GM retirees) who actually believed the legal cr@p that's been in place forever that bondholders were secured and first in line lost most ALL of the money they had invested in this company.
But have no fear, around 50% of the spoils went to people who deserved it, the UAW.
We (the bond holders) did get a bone tossed our way (oh thank you so much Mr. President) of about .12 cents on the dollar given in common shares of the "new" GM and some warrants for 2016. Unfortunately like the american public the price of this garbage has to go >$50 to get close to being worthwhile.
Sorry, had to vent after looking the other day at my once $50-$60k worth of stock plus the nice monthly dividend now reduced to a few thousand of common stock that can't seem to hold $25 a share in a company who's long term survival is still in doubt.

I feel sorry for the GM retirees who had hundreds of thousands of $$$ buried in the company, they and we were always told "it's a blue chip company and safe,safe,safe" to put your retirement in.
Merry Christmas!
One nice thing and a great Christmas present for people in my position who were robbed at pen point, Michigan is now a Right to Work state. UAW!
Pensions and stock and (ESOPs) are still basing your retirement on "one" company that may or may not stay afloat long term.

Most GM employees were compensated pretty well for decades, so saving a 10% or so in IRA for 30 years would have resulted in a decent retirement.
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Old 12-11-2012, 09:51 PM
 
4,173 posts, read 3,055,443 times
Reputation: 2629
Quote:
Originally Posted by jimj View Post
You're right, you should save up for retirement like by investing in bonds maybe take advantage of an employee stock ownership program (ESOP). Yep, bonds are the safe way to plan for retirement! Oh wait, I forgot something. Not only are these retirees losing a lot of their pensions but they (along with many other non GM retirees) who actually believed the legal cr@p that's been in place forever that bondholders were secured and first in line lost most ALL of the money they had invested in this company.
But have no fear, around 50% of the spoils went to people who deserved it, the UAW.
We (the bond holders) did get a bone tossed our way (oh thank you so much Mr. President) of about .12 cents on the dollar given in common shares of the "new" GM and some warrants for 2016. Unfortunately like the american public the price of this garbage has to go >$50 to get close to being worthwhile.
Sorry, had to vent after looking the other day at my once $50-$60k worth of stock plus the nice monthly dividend now reduced to a few thousand of common stock that can't seem to hold $25 a share in a company who's long term survival is still in doubt.

I feel sorry for the GM retirees who had hundreds of thousands of $$$ buried in the company, they and we were always told "it's a blue chip company and safe,safe,safe" to put your retirement in.
Merry Christmas!
One nice thing and a great Christmas present for people in my position who were robbed at pen point, Michigan is now a Right to Work state. UAW!
For the past 30 years everything I've read indicated that investing in equities and bonds involved RISK and no one should put too much of their investment in the company they work for. Anyone who believed "it's a blue chip company and safe,safe,safe" had their heads buried in the sand. I know, I work for a company that offered ESOP, ESPP and a company stock component to the 401K. Every financial adviser strongly recommended against investing in those things while also counting on the company for a paycheck and pension. I know a lot of people who lost a lot of money due to greed and because they ignored such advice.

The writing was on the wall for GM long before anyone in the government got involved. Anyone who was voluntarily still holding an equity position in 2008 was playing with fire! Why blame the UAW and ignore the way management operated the company for 30 years? The board and executive team and even white collar workers held all the cards and made all the decisions. UAW workers were barely compensated by comparison to the "spoils" they received!

You should have sold your stock when it was still worth $50k and you wouldn't be looking for scapegoats. The pension recipients had no such recourse.
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Old 12-12-2012, 05:11 AM
 
Location: LEAVING CD
22,951 posts, read 23,357,315 times
Reputation: 15543
Quote:
Originally Posted by shaker281 View Post
For the past 30 years everything I've read indicated that investing in equities and bonds involved RISK and no one should put too much of their investment in the company they work for. Anyone who believed "it's a blue chip company and safe,safe,safe" had their heads buried in the sand. I know, I work for a company that offered ESOP, ESPP and a company stock component to the 401K. Every financial adviser strongly recommended against investing in those things while also counting on the company for a paycheck and pension. I know a lot of people who lost a lot of money due to greed and because they ignored such advice.

The writing was on the wall for GM long before anyone in the government got involved. Anyone who was voluntarily still holding an equity position in 2008 was playing with fire! Why blame the UAW and ignore the way management operated the company for 30 years? The board and executive team and even white collar workers held all the cards and made all the decisions. UAW workers were barely compensated by comparison to the "spoils" they received!

You should have sold your stock when it was still worth $50k and you wouldn't be looking for scapegoats. The pension recipients had no such recourse.
I don't disagree with much of what you say. Not looking for "scapegoats", I listened to my broker and believed what I was told (as did thousands, no,hundreds of thousands of other people not to mention all of the Funds that held the stock/bonds) that the worst case scenario would be that they'd go BK (they did) and that being "secured" creditors we'd come out pretty much whole including interest on suspended dividends so the risk was acceptable.
I'm not ignoring anything, I'm not ignoring the way management ran things, I'm not ignoring the Union's role in the demise and I'm not saying the UAW members got it all but the UAW (as an organization) certainly got way more than they deserved under the LAW. There's the rub right there, the LAW. Nobody had any idea that the government would step in and totally ignore the LAWS and by the time it was understood what was happening the only recourse (due to the now worthless paper we were holding and the fact that trading was frozen) was to see if legal action would restore our rights. Unfortunately the President and the UAW won out which was no surprise.
So, no tears from me for Michigan's new right to work status. Maybe the Union's strangle hold on companies will now be lessened. Their revenue certainly will be.

Last edited by jimj; 12-12-2012 at 05:23 AM..
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Old 12-12-2012, 02:09 PM
 
55,059 posts, read 43,917,363 times
Reputation: 34450
Quote:
Originally Posted by myrc60 View Post
The number of citizens in poverty will increase.

I understand the logistics of this move, but when you promise someone something that's guaranteed for a lifetime and then you cut it; you are breaking your promise. There should be recourse for the people affected but we know from experience that the court's will let these companies get away with breaking their promises. So much for the little guy.
At least the companies are forced to accrue a liability for future pension and health benefits as required by the law.

The government has no such obligation and as such you have states like IL and CA staring into a financial abyss and openly stating they may need to reduce the pensions of state workers.

Additionally, companies that hit economic hardship and are teetering on bankruptcy often CANNOT make the neccessary contributions without going bankrupt.

I guess that it's not like GM is doing awesome and is just not choosing to pay.

At least they have their pensions and many of them are old enough to get medicaid.

My uncles company went under and he is getting about 60cents on the dollar for his pension.
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Old 12-12-2012, 02:12 PM
 
55,059 posts, read 43,917,363 times
Reputation: 34450
Quote:
Originally Posted by shaker281 View Post
For the past 30 years everything I've read indicated that investing in equities and bonds involved RISK and no one should put too much of their investment in the company they work for. Anyone who believed "it's a blue chip company and safe,safe,safe" had their heads buried in the sand. I know, I work for a company that offered ESOP, ESPP and a company stock component to the 401K. Every financial adviser strongly recommended against investing in those things while also counting on the company for a paycheck and pension. I know a lot of people who lost a lot of money due to greed and because they ignored such advice.

The writing was on the wall for GM long before anyone in the government got involved. Anyone who was voluntarily still holding an equity position in 2008 was playing with fire! Why blame the UAW and ignore the way management operated the company for 30 years? The board and executive team and even white collar workers held all the cards and made all the decisions. UAW workers were barely compensated by comparison to the "spoils" they received!

You should have sold your stock when it was still worth $50k and you wouldn't be looking for scapegoats. The pension recipients had no such recourse.
Yep. Any retirement planner worth a penny is going to tell you not to have all your financial eggs in one basket. If people can't be bothered to do basic retirement planning I have to consider them similarily to the people that complain about getting ARM loans and then saying later that "they didn't understand they worked that way".
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Old 12-12-2012, 06:22 PM
 
Location: LEAVING CD
22,951 posts, read 23,357,315 times
Reputation: 15543
Quote:
Originally Posted by Mathguy View Post
Yep. Any retirement planner worth a penny is going to tell you not to have all your financial eggs in one basket. If people can't be bothered to do basic retirement planning I have to consider them similarily to the people that complain about getting ARM loans and then saying later that "they didn't understand they worked that way".
You're assuming that they and I had everything in one place. I didn't as I'm pretty sure others didn't but it was a chunk that still hurt and one that didn't have to end like it did. It could have ended in the way that was expected by following the law.
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Old 12-12-2012, 06:29 PM
 
20,950 posts, read 16,798,896 times
Reputation: 10270
Sorry, but f*#k 'em.

They were responsible for building junk for decades which gave the Japanese automakers the ability to get the foothold in America.

"We the People" saved their asses when they should have been cut in 2008.
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Old 12-12-2012, 09:13 PM
 
48,509 posts, read 86,134,373 times
Reputation: 18105
Quote:
Originally Posted by John1960 View Post
After years of getting generous coverage, retirees from salaried jobs at General Motors Corp. reacted angrily Tuesday to the announcement that GM was ending their health benefits.

"I'm disappointed in the lifetime promise GM made to us," said John Fleming, 67, of Rochester Hills, a retired information system auditor.

Shell-shocked GM retirees react: 'This is a knife stab in the back' | Freep.com | Detroit Free Press (http://www.freep.com/apps/pbcs.dll/a...SS01/807160357 - broken link)
Well GM did go thru forced bankrupsy . The terms were written by the Obama adminsistration. Alot of bondholders were also upset since under normal bankruspy they would have been above the unions.T hey can basically thank the Obama adminsitration who wrote the terms on who got what under the forced terms of bankrupsy.
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Old 12-12-2012, 11:47 PM
 
4,173 posts, read 3,055,443 times
Reputation: 2629
Quote:
Originally Posted by jimj View Post
...So, no tears from me for Michigan's new right to work status. Maybe the Union's strangle hold on companies will now be lessened. Their revenue certainly will be.
As far as I am concerned the unions power balances managements desire to squeeze employees when management business plans fails to maintain a healthy company due to greed or ineptitude. In my company after 24 years on the job executive staff froze our pensions and took away retiree heath care. Because the unions have a contract, they did not get screwed! Not yet anyway! The unions may have used leverage to get better employment terms, but both sides took what they could get.

GM management made ALL the decisions, they determined product upgrade cycles, material and hardware quality, design and engineering directions, warranty support policies...everything! They chose to sign the contracts to insure workforce stability. Then, they failed to take any responsibility for the mess they created and blamed the guys on the assembly line. Don't forget that GM's white collar workers and executive staff all got much more lucrative pensions and benefit packages along the way. They gloss over that though. And people fall for it: Screw the little guy and all our problems will be solved. Sure they will! Just another step in the direction of eliminating a healthy middle class.

Now management has a stranglehold in Michigan. With no checks or balances. But, surely they will use their new found power wisely! Ahahahahaha

Last edited by shaker281; 12-13-2012 at 12:11 AM..
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