Filed under: Government/Legal, Chrysler, Ford, GM, Earnings/Financials, UAW/Unions
There's $77 billion owed to the pension plans contributed to by auto industry manufacturers and partner companies and we're to assume that at least seven billion of that is owed by Ford to the UAW's Voluntary Employment Benefit Association. The way Ford is going, it looks likely to pay that off without needing unsavory assistance. When it comes to General Motors' and Chrysler's obligations over the next five years, though, the Government Accountability Office has warned that Uncle Sam still needs to keep a close eye on whether both automaker's debts will be paid on time.GM has $12.2 billion in pension liabilities, while Chrysler has $2.62 billion due merely to keep up with obligations over the next five years. Even though they came out of bankruptcy and trimmed their workforces, both are still on the hook for to pay white- and blue-collar pensions. The GAO's concern is whether they will be profitable enough in the next five years to keep up with those payments. If not, the hook gets transferred to the government to the order of $14.5 billion.
GM appears to be slowly turning its ship, but we're still in the dark about Chrysler. However, we know the Pentastar has big plans and one figures Marchionne didn't buy the company just to go bust. That means that at the moment, this is only bell-ringing on the part of the GAO. But don't take your eyes off the ball, guys.
[Source: New York Times]
Not out of the woods yet: GAO issues warning on automaker pensions originally appeared on Autoblog on Mon, 12 Apr 2010 07:19:00 EST. Please see our terms for use of feeds.
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