June
13, 2012
Mr.
Daniel F. Akerson
Chairman
and CEO
General
Motors Corporation
300
Renaissance Center
Detroit,
Michigan 48265
Dear
Mr. Akerson:
I
am writing this letter to you on behalf of the 118,000 salaried retirees of
General Motors Corporation (“GM”) to express to you our absolute consternation
and disgust at the decision you have made with respect to our pension plan. By eliminating this large class of salaried
retirees from the pension plan, you are abandoning the hard-earned benefit of
an ERISA-protected pension promised to thousands upon thousands of GM retirees
in return for their commitment and loyalty.
This surpasses basic unfairness; indeed, it is sheer irresponsibility
and greed.
Salaried
retirees are being offered two choices but in either case GM wins and retirees
lose. Taking a lump sum places the retirees plan assets at risk in the
financial marketplace while reducing GM’s liabilities and temporarily props up
the company balance sheet. Those not eligible for the lump sum offer and all
others not offered the choice must accept a third-party annuity and forgo both
the protection of ERISA and the PBGC as well as GM’s commitment to fund the
plan and any hope for a cost-of- living adjustment.
Particularly
galling about this action is that GM has benefitted greatly from the pension
plan, despite great risk to plan participants.
In fact, GM used $2.9 billion in pension assets to make lump sum restructuring
severance payments during 2008 – and ended the year with a $12.4 billion
deficit ($20 billion by PBGC calculations).
GM’s raid on the pension fund resulted in such a dangerous degree of
under-funding that in early 2009 the Executive Director of the PBGC wrote GM
management, asking them to desist from reverting plan assets for fear that such
action could trigger a plan termination.
GM
does not need to take this step in order to remain competitive with the other
American automobile manufacturers. Ford
is still offering a traditional pension plan with all its security to those who
elect not to take the lump sum offered by the company, and Chrysler has stated
that it has no intention of ending its plan. GM stands alone among the U.S.
automakers in throwing its retirees under the bus and renouncing its promises
to its most loyal former employees. Surely GM management is as competent as
other competitive managers in the auto industry who believe they can create a
strong balance sheet without risking retirees economic futures.
As you know very well, GM, for many,
many decades, was able to attract and retain the best talent pool of engineers
and management staff with the ever-present promise and smiling assurance of deferred
compensation by way of a federally-insured pension benefit, payable each year
upon retirement. With that promise, GM
benefitted greatly by the hard work from the most loyal employees any
corporation could ever expect to have anywhere in the world. Never, even in our wildest imagination, could
we ever have foreseen that GM would then turn around and treat its retirees
with such little regard and with such disdain as GM is doing now. Once again,
salaried retirees, those of us not protected by a labor agreement, are being
singled out for disparate treatment.
Mr. Akerson, you still have an
opportunity to reverse this course of action and allow GM to treat its salaried
retirees with the respect and dignity they once felt. GM’s retirees do not
deserve this kind of treatment. It is
not a matter of depriving them of a gift; it is a matter of depriving them of
the financial security they earned. Please prove that GM management is not
morally or ethically bankrupt.
Sincerely,
Jim
Shepherd, President
General
Motors Retirees Association
8762
E Lariat Lane
Scottsdale,
AZ 85255-1457
Phone:
480-515-2765
Email:
[email protected]
