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Politics : View from the Center and Left -- Ignore unavailable to you. Want to Upgrade?

To: richardred who wrote (485)	6/7/2005 10:28:21 AM
From: Lane3	Read Replies (2) \| Respond to of 541477

This puts GM at a "significant disadvantage versus foreign-based competitors I don't get the "foreign-based" bit. I don't see why cars manufactured in the US would vary much given that almost all of the labor (the recipients of health care) would occur here.

To: richardred who wrote (485)	6/9/2005 9:07:48 PM
From: Peter Dierks	Read Replies (2) \| Respond to of 541477

The pension problem is large for American rust belt union shops. For years they produced what the country and the world needed. Companies were producing large profits and the union bosses used the threat of strike to feather their nests and negotiate better contracts for their employees. IBM got bad press a few years ago when they converted employee pension benefits from defined benefit* (DB) to defined contribution* (DC), I think the steel industry has mostly shed their retiree benefits. When the current worker to retiree ratio approached 1 to 1, large retiree benefits became impossible (in a globally competitive market) to sustain. Industrial age benefits were appropriate for a population expecting to getting cared for on their own farms by their family and the doctor they had known much of their lives. We now need to find a way to make changes appropriate to transition from a plan that worked in the past to one that will work in the future. Peter * DB - benefits are calculated based on something like wages earned. Employer absorbs investment risk. Some retirees die young leaving more investments to cover those who live longer. * DC - contribution is calculated based on some factor such as current wages. Employee absorbs investment risk and risk of outliving their benefits. My original DBlend idea: Use forced DC plans and pool a portion of retirement assets so that those who die young can help finance those who might otherwise outlive their assets.