Pension costs could bankrupt some firms

New Orleans Times-Picayune ^ | August 24, 2003 | Rick Haglund

[sarcasm]

Leaving a legacy is usually considered a good thing. But not if you're talking about the domestic airline, auto and steel businesses.

These three industries, all with storied histories, complain that their legacies are a drag on their competitiveness against newer, more nimble rivals.

[sarcasm]

Not to worry - the taxpayers will pick up the tab.

[Lonesome in Massachussets]

Wait a minute, these unfunded liabilities are a lien - a legal claim on the company. You can't have the assets and goodwill of the company and ignore the debts. Gee, my biggest worry is my morgage. (Next is taxes). If I could just get the government to tell my creditors, "Sorry, Lonesome wants to keep his house, but you'll have to forget about getting paid."

[afz400]

"Not to worry - the taxpayers will pick up the tab."
After the CEO looted his fair share of course then outsources whats left and leaves the rest of the country to pick up the tab. Everyone but the CEO is bankrupt. Ain't the new breed of American (traitor) capitalist grand!

[sarcasm]

See Bethlehem Steel

[sarcasm]

Asian and European automakers with U.S. assembly plants, known as transplants, are so new that they have almost no retirees, "meaning their legacy costs are minimal or nonexistent," GM says.

Ahem.

[harpseal]

Ping

On or off let me know.

[harpseal]

In no particular order of importance.

1. Get rid of government subsidies for offshore investment of US companies. OPIC is the first such program which should go but support of World Bank programs that subsidize the outflow of Capital would be another.

2. Use tariffs on those nations which are engaged in unfair trade practices such as currency manipulation (China and India for example), those nations which refuse to open their markets to US products (China for example with its 50% tariffs on US consumer goods and non tariff barriers), those nations that subsidize competition to American Industry (airbus for example) and those nations which have slave conditions for their workers.

3. Use tariffs and other means to prevent the relocation of jobs offshore that are essential to the national defense. If necessary take control of the company seeking to export vital technology or industry by means of eminent domain (No I do not like this last option and I will only defend its use as an absolute last resort like say in the case of rare earth magnets essential to smart bomb technology). Provide a hardened, widely distributed infrastructure to supply all that is needed for our military units and civil defense that can be continued to be deployed in the event of any military attack.

4. An immediate end to guest worker programs. If people wish to come to the USA to work and make a life let them immigrate according to the rules.

5 Provide economic development zones where the corporate income tax is zero for operations within these zones. In order to operate in this zone a company must agree to only purchase American components if available and employ only American citizens or legal immigrants in these operations. These economic development zones shall be eventually be expanded to include every bit of every state once the benefits are shown I would like them to be totally implemented immediately but I realize4 that may be overreaching.

6. Scale back unnecessary regulation including the tort system. Institute a cap on punitive damages, limits on class action suits, and limits on liability to the actual percentage of liability with no plaintiff able to collect if said plaintiff was involved in the commission of a felony at the time of the alleged tort or was more than 49% negligent in the alleged tort. Note that the loser in a frivolous lawsuit shall pay the attorney fees of the winner. There are many other regulatory structures that also need to be included that need to be included such as repealing the Family leave mandate, getting rid of OSHA etc.

7. Increase the domestic content in purchases by the Department of defense and give absolute preference in non-domestic content to proven allies of the USA over say the French or Germans. The only reason any content for DOD purchase may come from non US allies is that content is not available elsewhere and is essential.

8. Do not allow expense involved in moving operations overseas to be included in business expenses under the IRS code.

9. Prosecute for perjury anyone who has made a false statement in order to employ an H1B or L1 visa worker. I will be lenient on the actual perjurer if he/she was ordered to make this false statement and he/she provides testimony to aid in the conviction of the person ordering the perjury. Just because a person is a CEO does not give them a pass on criminal behavior.

10. Prosecute anyone who orders the transfer of vital defense technology or funds a R&D project that could be of use to our military overseas except to strong allies of the USA. Make the necessary enhancements to our espionage laws so that continued support or funding of any R&D in a nation whose government has threatened the USA is guilty of espionage. The UK and Australia come to mind as meeting these criteria for being eligible for transfer of technology first. There will be other nations and a gradation of what can be transferred to which specific nation. Under no circumstances may technology be transferred to any nation whose government has threatened the USA within five years without a complete change of government or specific exemption from Congress and the administration.

11. Deport all illegal aliens immediately and take measures that prevent the entry of any more illegal aliens. Fine all companies knowingly employing illegal aliens Criminal sanctions should be imposed on anyone helping an illegal alien stay in the USA in violation of our laws.

12. Decrease the punishing levels of taxation on companies and eliminate the double taxation on corporate dividends. See effects of item 5 for how minimal this will be if item 5 covers the entire USA. Eliminate all IRS provisions that inhibit free use of independent contractors by businesses for example section 1706.

13. Eliminate the minimum wage so that the worker can be paid based on productivity. Overtime compensation will remain the same but instead of 150% of the "wage" the worker would receive 150% of the production pay. If one through 13 are enacted # 14 becomes an irrelevancy as no one will be working for that low a wage.

Now since I started posting this plan another idea has come up that in my opinion is a very good policy that stands on its own. Now I give credit to Jim Gibson and Freeper Ed_in_NJ for coming up with the idea, separately to the best of my knowledge. However I can be corrected on that. The tariff phrasing is from Jim Gibson.

“I suggest that the US Customs Department charge a $1,000-per-container inspection fee on every container entering the United States. This fee would be used to completely fund the cost of inspections. If we assumed that a four-man team could fully inspect two containers a day or about 500 per year, it would require 48,000 inspectors. Allowing for at least 2,000 support personnel, we would need at least 50,000 workers. Because these workers would require high intelligence and skill levels they should earn at least $30 per hour. At 40-hour weeks plus benefits, I estimate the cost per worker to be over $75,000 per year, all paid by the foreign manufacturers. Even so, this would still leave over $2.25 billion to cover all other costs. Any revenue not used would be used to compensate American workers displaced by foreign imports. “

I urge and encourage everyone who agrees with this plan and or the terror tariff idea to communicate this to every politician you can think of.

[harpseal]

Asian and European automakers with U.S. assembly plants, known as transplants, are so new that they have almost no retirees, "meaning their legacy costs are minimal or nonexistent," GM says.

Since European automakers as a general rule do also have legacy costs in Europe that are government subsidized the competition there has some clear downsides but then again teh Chairman of GM knows this are not SAAB and OPel still GM brands. Of cours eMitsubishi is associated with Ford and Daimler and Chrysler are merged entities.

Of course what he is really tryinbg to say is we need to buy more from China now to make profits now and worry anout the transfer of technology later because by then I will have taken my golden parachute and bailed out and the stockholders be damned.

For those who might like to address this problem and improve the investment climate in the USA. Once more the plan for a start. In no particular order of importance. 1. Get rid of government subsidies for offshore investment of US companies. OPIC is the first such program which should go but support of World Bank programs that subsidize the outflow of Capital would be another. 2. Use tariffs on those nations which are engaged in unfair trade practices such as currency manipulation (China and India for example), those nations which refuse to open their markets to US products (China for example with its 50% tariffs on US consumer goods and non tariff barriers), those nations that subsidize competition to American Industry (airbus for example) and those nations which have slave conditions for their workers. 3. Use tariffs and other means to prevent the relocation of jobs offshore that are essential to the national defense. If necessary take control of the company seeking to export vital technology or industry by means of eminent domain (No I do not like this last option and I will only defend its use as an absolute last resort like say in the case of rare earth magnets essential to smart bomb technology). Provide a hardened, widely distributed infrastructure to supply all that is needed for our military units and civil defense that can be continued to be deployed in the event of any military attack. 4. An immediate end to guest worker programs. If people wish to come to the USA to work and make a life let them immigrate according to the rules. 5 Provide economic development zones where the corporate income tax is zero for operations within these zones. In order to operate in this zone a company must agree to only purchase American components if available and employ only American citizens or legal immigrants in these operations. These economic development zones shall be eventually be expanded to include every bit of every state once the benefits are shown I would like them to be totally implemented immediately but I realize4 that may be overreaching. 6. Scale back unnecessary regulation including the tort system. Institute a cap on punitive damages, limits on class action suits, and limits on liability to the actual percentage of liability with no plaintiff able to collect if said plaintiff was involved in the commission of a felony at the time of the alleged tort or was more than 49% negligent in the alleged tort. Note that the loser in a frivolous lawsuit shall pay the attorney fees of the winner. There are many other regulatory structures that also need to be included that need to be included such as repealing the Family leave mandate, getting rid of OSHA etc. 7. Increase the domestic content in purchases by the Department of defense and give absolute preference in non-domestic content to proven allies of the USA over say the French or Germans. The only reason any content for DOD purchase may come from non US allies is that content is not available elsewhere and is essential. 8. Do not allow expense involved in moving operations overseas to be included in business expenses under the IRS code. 9. Prosecute for perjury anyone who has made a false statement in order to employ an H1B or L1 visa worker. I will be lenient on the actual perjurer if he/she was ordered to make this false statement and he/she provides testimony to aid in the conviction of the person ordering the perjury. Just because a person is a CEO does not give them a pass on criminal behavior. 10. Prosecute anyone who orders the transfer of vital defense technology or funds a R&D project that could be of use to our military overseas except to strong allies of the USA. Make the necessary enhancements to our espionage laws so that continued support or funding of any R&D in a nation whose government has threatened the USA is guilty of espionage. The UK and Australia come to mind as meeting these criteria for being eligible for transfer of technology first. There will be other nations and a gradation of what can be transferred to which specific nation. Under no circumstances may technology be transferred to any nation whose government has threatened the USA within five years without a complete change of government or specific exemption from Congress and the administration. 11. Deport all illegal aliens immediately and take measures that prevent the entry of any more illegal aliens. Fine all companies knowingly employing illegal aliens Criminal sanctions should be imposed on anyone helping an illegal alien stay in the USA in violation of our laws. 12. Decrease the punishing levels of taxation on companies and eliminate the double taxation on corporate dividends. See effects of item 5 for how minimal this will be if item 5 covers the entire USA. Eliminate all IRS provisions that inhibit free use of independent contractors by businesses for example section 1706. 13. Eliminate the minimum wage so that the worker can be paid based on productivity. Overtime compensation will remain the same but instead of 150% of the "wage" the worker would receive 150% of the production pay. If one through 13 are enacted # 14 becomes an irrelevancy as no one will be working for that low a wage. Now since I started posting this plan another idea has come up that in my opinion is a very good policy that stands on its own. Now I give credit to Jim Gibson and Freeper Ed_in_NJ for coming up with the idea, separately to the best of my knowledge. However I can be corrected on that. The tariff phrasing is from Jim Gibson. “I suggest that the US Customs Department charge a $1,000-per-container inspection fee on every container entering the United States. This fee would be used to completely fund the cost of inspections. If we assumed that a four-man team could fully inspect two containers a day or about 500 per year, it would require 48,000 inspectors. Allowing for at least 2,000 support personnel, we would need at least 50,000 workers. Because these workers would require high intelligence and skill levels they should earn at least $30 per hour. At 40-hour weeks plus benefits, I estimate the cost per worker to be over $75,000 per year, all paid by the foreign manufacturers. Even so, this would still leave over $2.25 billion to cover all other costs. Any revenue not used would be used to compensate American workers displaced by foreign imports. “ I urge and encourage everyone who agrees with this plan and or the terror tariff idea to communicate this to every politician you can think of.

[harpseal]

You mean I get to do this I can just say to my mortgage holder I do not want to pay you anymore and I get to keep my house. Does this work with the electric company so they have to keep giving me electricity. I thought that if one did not pay them tehy cut one off. Silly me.

[lonestar]

The very same thing is happening with government employees-- every govt employee is expecting retirement benenfits from city, county, to federal.

[PGalt]

Good post. Thanks for the ping.

[Koblenz]

But shouldn't these companies have funded their pension funds adequately while the workers were working? The problem here is that these companies did not set aside enough funds to meet their obligations. This has to do with overly optimistic (or, depending on your view, pessimistic) death rate assumptions and future health care costs. If you are a company, and you promise to make payments, you have to make good on those payments. Now, if the government changes the rules, that's one thing. But if you exercised poor planning, that's another.

[Lonesome in Massachussets]

Funny, my wife's cousin used to work for Bethelem Steel, until his plant was closed. Her father and his brother also worked there briefly. Her father before the war, his brother before and during. (He joined the Army, B.S. got him discharged to work in the steel mill. He was a very talented guy, in an intuitive way. I think before he saw the Army up-close it sounded better than the mill.)

My father-in-law absolutley felt that the unions killed Bethelhem Steel, but he sure didn't want to work there.

[demkicker]

Ain't the new breed of American (traitor) capitalist grand!

By allowing corrupt and sleazy captialists to get away with financial murder, the result will be disaterous. The sheeple will jump into the wolves mouths, the democrat party. Without a turn around and some punative well written laws that will actually protect nest eggs, I fear we're headed towards becoming a full blown socialist state without a shot being fired.

If this is true and masses of workers who were promised a pension after dedicating their working lives find out they're getting screwed in their golden years, well, I can't even bear to think about what will happen....

[Lonesome in Massachussets]

>> You mean I get to do this I can just say to my mortgage holder I do not want to pay you anymore and I get to keep my house{?}

No. It doesn't work that way. You need to get the government to tell that to your mortgage lender. It's just that easy. Of course if you do, you or anyone else will have trouble ever getting another mortgage.

[eeriegeno]

harp, I agree with your suggestions 101%. But, since the suggestions would nearly close the campaign contributions from special interest groups, I hardly think that our politicians would enact a single suggestion.

The politician's ultimate goal is to get relected to perpetuate the growth of the royal families in Washington, DC. It seems that they could care less about the safety, security, and prosperity of their constituents.

IMHO, about the only thing that will change the mindset of the average politician is 'term limitations.' It is commonly perceived that a freshman congressman is corrupted by the system after his first term. Why not limit it there. One term of six years then send the congressman packing. Then perhaps, they might put the future of America ahead of their political career.

[winodog]

And that is just one more reason why fedgov.org has a huge problem just down the freeway.
Before long the words baby boomers will be hated , reviled and just might be the straw that breaks the camels back.

[ivanhoe116]

Whoa, afz are you right on!

We’re just recovering (out of C11 March 03) from the rape of our airline (USAirways) by the wolf-gang, better know as CEO Stephen Wolf and acting president, Rakish Gangwal.

Their game plan of piss-coating a strong (note the east coast franchise) domestic carrier and selling it off as an international “airline of choice”, at a time when the general public didn’t know the line from a start-up, was a complete joke.

Both these traitors, as you aptly put it, walked off with millions of hard earned dollars after their plan to merge US with United crashed in Congress. Sadly, 911 is the cover story for the current situation.

[harpseal]

No. It doesn't work that way. You need to get the government to tell that to your mortgage lender. It's just that easy. Of course if you do, you or anyone else will have trouble ever getting another mortgage

What's good for GM is good for the nation. I guess I better build a really big house first on the water with about a hundred acres here in CT private dock in ground and separate indoor pools all the amenities. hey all I will have to do is sign on the dotted line and tell the government to pick up the tab. Soundsa like a great deal to me. Hey I can even get ioncome by renting out hovels on the outsjirts of my land to "little people" who will then farm a small part fo this land to produce more income for me.

I am liking this better and better.

Now I am admittedly a good shot but I think I will with all this propertu need a security system and maybe even a force to protect my investment and income after all its my house I signed for it and got the government to pay for it right? No problem I ghave teh income from the sale of the of the food grown on the land and even the people who are farming will need to get their food someplace. I can charge them watever I want.

No wait a minute there are grocery stores they could possibly walk to which might charge them less. I guess I better make them sign a contract that they will not leave the land and I can use the security force to make certain that does not happen.

Gee I am liking this better and better.

All I need is a corporate charter? Got that already I am presuming of course I can use this same program to have the government assume all my liabilities. I do think i will have to build in a much higher pension for me so when the government picks that liability up it is sufficient for all my needs in this new role.

After all what's good for me is what's good for the country.

America what a country.