GM to Stop Paying Into Some 401(k)s

[Newbiewar]

[quote name='http://news.moneycentral.msn.com/provider/providerarticle.asp?Feed=AP&Date=20051215&ID=5356748']DETROIT (AP) - General Motors Corp. has reportedly told its white-collar workers that it will suspend making matching contributions to their 401(k) retirement savings accounts and will reduce the severance benefits it pays.

The world's biggest automaker is under pressure to cut costs as it lost $1.6 billion in the third quarter, and has seen erosion in its U.S. market share to Asian-based automakers.

GM distributed an information packet Wednesday on the benefit changes for its 36,000 U.S. salaried employees, The Detroit News said in Thursday's editions.

The newspaper said GM told the employees that it would stop contributing 20 cents for each $1 that employees put into the company's 401(k) program, starting Jan. 1.

"Based on current business conditions ... the GM matching contribution ... will be temporarily suspended," the newspaper said, citing the document. "We will continue to monitor the business outlook in determining the appropriate time to reinstate GM's matching contribution."

In April, GM cut its 401(k) match from 50 cents on the dollar to 20 cents. The match covered contributions of up to 6 percent of salary.

GM said white-collar workers no longer must put part of the company-supplied portion of their 401(k) accounts in GM common stock, which has been losing value.

The company also said that white-collar severance packages will limit payments to one month's base salary for each year of work up to 15 months.[/quote]

[SingleStylish]

DETROIT (AP) - General Motors Corp. has reportedly told its white-collar workers that it will suspend making matching contributions to their 401(k) retirement savings accounts and will reduce the severance benefits it pays.

The world's biggest automaker is under pressure to cut costs as it lost $1.6 billion in the third quarter, and has seen erosion in its U.S. market share to Asian-based automakers.

GM distributed an information packet Wednesday on the benefit changes for its 36,000 U.S. salaried employees, The Detroit News said in Thursday's editions.

The newspaper said GM told the employees that it would stop contributing 20 cents for each $1 that employees put into the company's 401(k) program, starting Jan. 1.

"Based on current business conditions ... the GM matching contribution ... will be temporarily suspended," the newspaper said, citing the document. "We will continue to monitor the business outlook in determining the appropriate time to reinstate GM's matching contribution."

In April, GM cut its 401(k) match from 50 cents on the dollar to 20 cents. The match covered contributions of up to 6 percent of salary.

GM said white-collar workers no longer must put part of the company-supplied portion of their 401(k) accounts in GM common stock, which has been losing value.

The company also said that white-collar severance packages will limit payments to one month's base salary for each year of work up to 15 months.

[post="59072"]<{POST_SNAPBACK}>[/post]

And tell me again why the UAW is crying... this should outrage everyone that an uneducated workforce gets paid and will retire better than those who worked hard for their skills and earned there position.

"Um... yes sir boss... I am quiting my crappily paid engineering job to go work on the line... it pays SOOO much better!"

[evok]

[post="59072"]<{POST_SNAPBACK}>[/post]

And tell me again why the UAW is crying... this should outrage everyone that an uneducated workforce gets paid and will retire better than those who worked hard for their skills and earned there position.

"Um... yes sir boss... I am quiting my crappily paid engineering job to go work on the line... it pays SOOO much better!"

[post="59076"]<{POST_SNAPBACK}>[/post]

Years ago I was told this story in reference to a GM stamping plant over in Grand Rapids. I do not remember it verbatim, but because of GM very liberal continuing education with their UAW staff, GM had a number of PhD. working the line, that were earned through GM tuition reinbursment program. In the end, it payed for them to continue what they were doing because the money and perks were better.

[SingleStylish]

[quote name='evok' date='Dec 15 2005, 01:13 PM']
And tell me again why the UAW is crying... this should outrage everyone that an uneducated workforce gets paid and will retire better than those who worked hard for their skills and earned there position.

"Um... yes sir boss... I am quiting my crappily paid engineering job to go work on the line... it pays SOOO much better!"

[post="59076"]<{POST_SNAPBACK}>[/post]

[/quote]
Years ago I was told this story in reference to a GM stamping plant over in Grand Rapids. I do not remember it verbatim, but because of GM very liberal continuing education with their UAW staff, GM had a number of PhD. working the line, that were earned through GM tuition reinbursment program. In the end, it payed for them to continue what they were doing because the money and perks were better.

[post="59077"]<{POST_SNAPBACK}>[/post]

[/quote]


That infuriates me more now! You mean that the rank and file even have PhD's and still cannot comprehend the impending doom?! Surely, the educated are few in number. I would like to think that our universities in this country have taught people to think beyond themselves.

I for one, enjoy being an engineer and couldn't even think about being a part stamping tech. What type of person would waste a great education? Why would anyone conciously choose to add little value to their lives if they are capable of so much more?

[evok]

That infuriates me more now!  You mean that the rank and file even have PhD's and still cannot comprehend the impending doom?!  Surely, the educated are few in number.  I would like to think that our universities in this country have taught people to think beyond themselves.

I for one, enjoy being an engineer and couldn't even think about being a part stamping tech.  What type of person would waste a great education?  Why would anyone conciously choose to add little value to their lives if they are capable of so much more?

[post="59083"]<{POST_SNAPBACK}>[/post]

Well I do not remember the detail but it was not huge number but what I was told was surprising. And yea rank and file. The degrees were not all in the sciences either, there were a bunch of touch feely degrees.

[Clownzilla]

[quote name='SingleStylish' date='Dec 15 2005, 12:08 PM']

[post="59072"]<{POST_SNAPBACK}>[/post]

[/quote]
And tell me again why the UAW is crying... this should outrage everyone that an uneducated workforce gets paid and will retire better than those who worked hard for their skills and earned there position.

"Um... yes sir boss... I am quiting my crappily paid engineering job to go work on the line... it pays SOOO much better!"

[post="59076"]<{POST_SNAPBACK}>[/post]

[/quote]

I agree 100%! I have preached this before several times and I will preach it again. All of the factory work is going to go to China, Mexico, etc.. While all the GM office operations (hmmmmmm..........non UAW) will stay in the USA. All because of this nonsense. Hey, I will sell a Chinese GM if it puts food on the table..........the table bought by a college educated person that NEVER had the sweet pay and benefits that the UAW has!

[razoredge]

Well, this is bull. Every employee deserves a retirement plan of some sorts. I think the top management should work for 0.00 before this kind of chiseling takes place. It was their poor decisions that lead to this bind. They should be locked in and working for nothing until it turns around. Then maybe they will get their jobs done. I feel badly for all here in N America that are and have been hurt by this "new economy" "boom economy" "global economy". We are the consumers we should also be the producers. This is just yet another effect of going "global". AND we are just at the beginning, give it 5 years, 10 years, fifteen years. Tic toc tic toc tic toc

[Ghost Dog]

And yet Gm Absurdly still gives a dividend.

[lakefire]

In GM's defense, there are several companies out there that don't match 401k at all. Now granted it sucks that they don't do that. The company that I work at now only matches if we have 5% profit or higher. It gives us incintive to be more effective at work. Of course it probably has a bigger affect on us since there are only 28 employees. Regardless, I am thinking of buying GM stock soon because it is diving so dramatically. Maybe I'll wait until they claim bankruptcy.

[fbodfather]

well...it affects me...but I gotta tell you.......while I wasn't jumping up and down at the news, I also understand that in order for the company to become strong once more, actions such as this are necessary.....in fact, crucial. I have a lot of respect for someone like Bill Ford who has turned down his salary until the company gets profitable once more. It concerns me greatly that there are those within the walls of GM and Ford and any other major company that have a "me first" attitude. That attitude is not what made this country great. I still say that it will be the hard work of many that save GM...not just one or two or a dozen. Call me naive, but that's the way I see it.

[NOS2006]

Dude, fbodfather, that's exactly how all the GM employees should feel. At least the ones that have been there long enough to honestly feel that way.

[Guest Josh]

More than one. Union "brothers" feel the same exact need. My pops one of 'em soon enough if he doesn't take his 30 years. I don't like how things are going to turn out sooner or later.

[hyperv6]

well...it affects me...but I gotta tell you.......while I wasn't jumping up and down at the news, I also understand that in order for the company to become strong once more, actions such as this are necessary.....in fact, crucial. 

I have a lot of respect for someone like Bill Ford who has turned down his salary until the company gets profitable once more.

It concerns me greatly that there are those within the walls of GM and Ford and any other major company that have a "me first" attitude.  That attitude is not what made this country great.  I still say that it will be the hard work of many that save GM...not just one or two or a dozen.

Call me naive, but that's the way I see it.

[post="59938"]<{POST_SNAPBACK}>[/post]

More need to think this way. They must give from the top to the bottom to make it and you lead by example!

Now I will not down Bill Ford for doing, what he is doing more need to follow his lead.

But on the other hand when your family is the largest share holder in the company you have a little more to lose if you don't do this.

[thegriffon]

Regardless, I am thinking of buying GM stock soon because it is diving so dramatically.  Maybe I'll wait until they claim bankruptcy.

[post="59412"]<{POST_SNAPBACK}>[/post]

In that case wait until they emerge from bankruptcy. Shareholders almost always lose everything when a company seeks the protection of bankruptcy. Fortunately there have been some encouraging signs. G6 sales finally took off in November, helping Pontiac to a bigger sales gain than Toyota. Same-model sales were up nearly 20% (excluding Bonneville, Firebird, Sunfire, Solstice, Torrent and Aztek). Although the Relay has not made up for the loss of the L-Series, sales at Saturn are relatively flat thanks to improved sales of the Vue, and a big boost for the Ion and Vue in November gave Saturn a bigger increase in sales than Pontiac. The Aura and Outlook could easily push Saturn well over 300K—ahead of Mazda, VW and Kia (they are already ahead of Mercury).

[Ghost Dog]

The Shame of it all would be for the Cash from a GMAC deal, to be used to pay off Kerkorian.(Dividend) When GM could be saved and Bancruptcy avoided with judicious use.

[4gm]

Do any "insiders" here think GM will actually declare bankruptcy? I just don't see it happening. They have too much money in the bank. They'd get too much money from a partial sale of GMAC. I see 2005 as GM's bottoming out year. By the end of 2006 they should start showing a profit, if not a little sooner, because of the new trucks and Saturns. I'm glad to see the G6 finally taking off. I've been seeing a lot of them here in Los Angeles recently, and not just rentals either. It's a great looking car. It just needs a better interior, powertrain and pricing. I fully expect to see sales continue to grow for the G6.

[fbodfather]

Do any "insiders" here think GM will actually declare bankruptcy?  I just don't see it happening.  They have too much money in the bank.  They'd get too much money from a partial sale of GMAC.  I see 2005 as GM's bottoming out year.  By the end of 2006 they should start showing a profit, if not a little sooner, because of the new trucks and Saturns. 

I'm glad to see the G6 finally taking off.  I've been seeing a lot of them here in Los Angeles recently, and not just rentals either.  It's a great looking car.  It just needs a better interior, powertrain and pricing.  I fully expect to see sales continue to grow for the G6.

[post="60040"]<{POST_SNAPBACK}>[/post]

It will be avoided at all costs.

The damage done by going chapter 11 is huge in terms of perception alone.

That's my take........not that I'm an expert....it's just my own thoughts.

[G. David Felt]

<_< Sad as these people who make a middle income salary are the REAL brains behind GM Products. It would serve the world and the company better if these Exec's, recognized the problems facing GM, Accepted a wage equal to the average wage for all employee's and gave up all but basic benefits to get the company on the right foot again. Then they have shown leadership and hardship on par with the employees and can take back an exec wage and benefits. I remember the day's when Iacocca took $1 a year till the company paid off the government and was profitable. Yes the Company also gave him a large stock package that matured over time if he hit specific goals and the end result was a profitable company, but at least no one on the assembly line on up could not say that the CEO and his mgmt team did not also sacrifice to save a company. GM Exec's still seem to be in an Ivory Tower that blinds them to the stupidity of this move. <_< :( Sad for all the salary folks and any other employees that count only on a 401K as a retirement plan. After all, I doubt I will ever really see Social Security when I retire in 37 years. :angry:

[Clownzilla]

Well, this is bull. Every employee deserves a retirement plan of some sorts. I think the top management should work for 0.00 before this kind of chiseling takes place. It was their poor decisions that lead to this bind.  They should be locked in and working for nothing until it turns around. Then maybe they will get their jobs done.

I feel badly for all here in N America that are and have been hurt by this "new economy" "boom economy" "global economy". We are the consumers we should also be the producers. This is just yet another effect of going "global".

AND we are just at the beginning, give it 5 years, 10 years, fifteen years.

Tic toc tic toc tic toc

[post="59287"]<{POST_SNAPBACK}>[/post]

No employee deserves a retirement plan! Employees get the privalage of getting a retirement plan! My pay + benefits is FAR less than many union workers but through wise living, wise savings, and wise investing, I take my future in my own hands. I don't count on the corporation to fund my future. This new economy is thriving by the people who understand that high paying USA production jobs are DEAD! Listen, it's hard to outsource most service and retail jobs (except phone customer service.......a whole other story). For some reason people think that production is the king of all jobs, and retail and service is a dirty word. Working at a GM dealership that sells and services GM product, I will keep selling vehicles to people that work in such industries. GM is getting killed in the market place, and it's hard to compete on price and product when the UAW is asking for way too much for our current production market. The only thing going Tic-Toc-Tic-Toc is the production jobs in the USA, not the rest of the jobs!

[razoredge]

No employee deserves a retirement plan! Employees get the privalage of getting a retirement plan! My pay + benefits is FAR less than many union workers but through wise living, wise savings, and wise investing, I take my future in my own hands. I don't count on the corporation to fund my future. This new economy is thriving by the people who understand that high paying USA production jobs are DEAD! Listen, it's hard to outsource most service and retail jobs (except phone customer service.......a whole other story).  For some reason people think that production is the king of all jobs, and retail and service is a dirty word. Working at a GM dealership that sells and services GM product, I will keep selling vehicles to people that work in such industries. GM is getting killed in the market place, and it's hard to compete on price and product  when the UAW is asking for way too much for our current production market. The only thing going Tic-Toc-Tic-Toc is the production jobs in the USA, not the rest of the jobs!

[post="61344"]<{POST_SNAPBACK}>[/post]

Nonsence ! Your mad because somebody else makes a better living than you. Your mad because someone else has some benefits you do not have.

Im not, I have no retirement, I have no insurance, whatsoever. Im not mad at these people and other people that got better jobs than me. I applaud them. Retiremnet plans were set up in this country many many years ago. They were well thought out and planed for. They were working excellent. Then they came up with 401's for the cheaper employers, where they might throw in $500 or $1000 per year. A joke actually. then for the rest they developed the IRA but many were only living week to week on a paycheck so IRA's will do little in the end. I also bet many lost all or most of it when our little puke schemers decided to play a little wall street money making scheme.

The parts of our economy that are thriving are the parts that makes extra money paying other countries citizens to do work dirt cheap. Another part is the health care industry that is thriving quite well stealing money like candy from a baby. Another part it the insurance industry that has gotten our government to regulate and mandate everything except themselves. Service ? service what ? just what services are needed today that have not always been needed ?

So if you feel as you do, then you also feel , corporate officers do not deserve a retirement......or bonuses......or health insurance......or life insurance.......or free phone calls......or company trips and vacations......company car.....or obscene wages ?

Are you sure employees are asking for way to much or is this free but not so free trade comming a bit cheap ?

it takes a special sort to be a car salesman.......... dont it ?

tic toc tic toc tic toc tic toc