Saving the US Auto Industry

[tw]

To claim profits, GM shorted their pension funds. Then lied by spinning it unfair legacy costs. (BTW, the Fox News propagandist also said same.) If (more likely, when) bankruptcy occurs, GM's obligations to pensioners would disappear. This means more $billions from the government (PBGC). But that only covers part of the $billions that GM shorted to claim profits and justify massive bonuses to their executives. Why does GM owe so much? Instead of addressing reasons for bankruptcy in 1991, bean counters (including Rick Wagoner) shorted the pension funds. When those employees were working, GM simply forgot to fund the pension fund. When those employees retired, GM still had not funded the pension fund.

This problem was obvious to everyone (who wanted to know) for the past 15 years. Some of us helped GM harm America. Some continued to buy the "Heart attack of America". Shame on anyone who bought a GM product in the past 15 years - helped GM continue their many scams.

To cover some debts, GM sold off Hughes Electronics. All profits from that sale (some tens of $billions) went into the pension funds. But that still was not enough because GM lies (creative accounting) was that massive. How large? From the Washington Post of 24 Apr 2009:

Retired Auto Workers Face Big Hit
If the GM pension plans are terminated, they would be at least $20 billion underfunded, according to the government's Pension Benefit Guaranty Corp. The federal agency would insure about $4 billion of that gap, leaving the GM pension plans with $100 billion in obligations and only $84 billion in assets.

Likewise, if the Chrysler pension plans are terminated, they would be at least $9 billion underfunded, according to the agency, which would insure about $2 billion of that. This would leave the Chrysler pension plans with $28 billion in obligations and only $20 billion of assets, according to the pension agency. ...

In addition to cuts in their pensions, the retirees also face potential reductions in their health benefits. GM owes $20 billion to its union retiree health fund, and Chrysler owes $10 billion to its fund.

Enron accounting has been alive and well. So extremists responded by subverting government oversight including the SEC - encouraged more Enron accounting.

For years, this Rick Wagoner promoted 'legacy costs' myth was so obvious that all should have known it. Nobody can deny the reality of a damning number that said GM was in trouble: 70 horsepower per liter engine.

More corporate welfare as government gets stuck with another $billions bill. How long ago had this event become obvious?
American protecting its turf
Enron accounting was alive and well and encouraged by deregulation. Time to start paying - and then Cellar extremists will again blame Obama.

Remember years ago when the LA Times defined how bad GM really was? So GM attacked the LA Times to bankrupt it. Of course. What's good for GM is good for America - no matter how much it harms America. That was the GM mantra even 30 years ago - for those who remember the 1970s. It never changed.

Good news though. America has many patriotic companies from Japan and Europe making cars here.

[xoxoxoBruce]

Originally Posted by tw

Shame on anyone who bought a GM product in the past 15 years - helped GM continue their many scams.

And you were doing so well, on a roll, up to this point. sigh

They not only underfunded the pension plans a lot of what they did fund was invested in GM stock.

[tw]

Originally Posted by xoxoxoBruce

They not only underfunded the pension plans a lot of what they did fund was invested in GM stock.

I forgot about that one. Yes, they did that too. But I never knew how much.

Will never forget sitting in a GM lobby alongside a president of one of their part suppliers. He said sarcastically, "They will show me how I can cut my costs." GM's solution to 30 years of bad designs. Blame suppliers, unions, Japanese ...

They also played money games. Waiting 120 days to pay us. And still some believed their lies about 19 models exceeding 30 MPG. After all, they said it on TV.

Anyone who bough a GM car simply endorsed lying and creative accounting.