You may have seen the story about the GoFundMe effort launched by TikTok “influencer” Samuel Weidenhofer on behalf of an 88-year-old former GM worker who had to work at a grocery store until just recently on account of his GM pension and promised health care benefits disappearing after GM went bankrupt in 2009.
Ed Bambas worked at GM for 40 years prior to his retirement at age 62 back in 1999. Ten years later, the pension he’d counted on to provide for him in retirement disappeared, along with a lot of other people’s pensions. These pensioners bore most of the cost of GM’s mismanagement, which was also paid for by the American taxpayers who bankrolled GM’s “restructuring,” which led to even more mismanagement – in battery powered devices – under CEO Mary Barra.
Barra has been paid something in the range of $30 million each year for this. Meanwhile, 88-year-old Bambas had to work at a supermarket to keep from being homeless. 
What’s most loathsome about this is that contractual obligations were not honored – for the workers who believed they had a legally binding contract with GM that amounted to part of their agreed-to compensation. Put another way: When these workers agreed to work for GM, they did so on the basis of GM’s agreeing to pay them “x” in wages and also “x” in benefits. These benefits – including the pension – were in other words part of what GM agreed to pay the workers. Would these workers have agree to the same pay in wages absent the promised benefits? Of course not, as that would have meant agreeing to work for less.
GM, in other words, defrauded these workers – with the help of the courts, which ruled that the workers’ owed benefits were no longer owed. Poof, just like that. Imagine how you’d feel if, let’s say, tomorrow the bank you do business with went bankrupt – due to reasons beyond your control and which you had no awareness of – and a court subsequently decided that the money you had in the bank was just gone.
Meanwhile, the people in charge of the bank didn’t have to pay a cent.
That is what happened to thousands of GM workers – including elderly retired ones – who discovered that their money (a pension obligation being just that) was just – poof – gone and now deal with it. Ed Bambas is one of many who has had to deal with it, by getting up and going to work despite the fact that he ought not to have to anymore.
Mary Barra doesn’t have to work, either. No one who gets paid around $30 million in one year has to work – ever again. Barra’s great-grandchildren will never have to work. It will be something they do if they want to.
This would be ok if GM had been forced to honor its contractual obligations – which the courts could have forced GM to to do by liquidating everything of value to pay off those obligations. When GM went bankrupt back in ’09, GM – the corporation – had billions in assets that could have been sold off and ought to have been sold off, if that was the only way to make whole the people GM owed money. Those pensions weren’t charity. They weren’t even like Social Security, which is nothing other than an intergenerational wealth transfer scam that steals money from today’s workers to pay today’s retirees. The pensions were agreed to and earned benefits, a qualitatively as well as morally different thing.
But GM was not forced by the courts to liquidate its assets to pay off its contractual obligations – because corporations get special treatment by the courts. Unlike the little people, which is us. See what happens if you welsh on what you owe. Your mortgage, for instance. Do you suppose the courts will allow you to keep your house?
In this case, it is like being kicked out of your house even though you faithfully paid the mortgage for many years, even decades. Remember: Pensions are typically things workers pay into while they’re working, very much like a mortgage.
Nevermind.
Ed Bambas’ story is why “capitalism” has become a kind of swear word to many. It is more accurate to speak of corporatism, for that is the system we’re talking about. In a corporatist system, Big Business and Big Government are functionally synonymous because they are incestuous. Big Business gets special protections and privilege from Big Government while Big Government gets to control Big Business, which serves to control the entire economy – and thereby us, the little people. There are rarely any meaningful consequences for incompetence and worse for those at the highest levels of the corporatocracy. Perhaps the best – and worst – example of this being the legalized drug cartels – Pfizer, et al – who have secured for themselves immunity for the harms they cause and use the government to cause those harms. 
Corporatism is a parody of capitalism, which is supposed to be synonymous with free exchange, which is antithetical to corporatism. From a libertarian point-of-view, the very idea of a corporation is obnoxious – because corporations are government-created entities and as such incompatible with the libertarian idea of free exchange. The most despicable thing about corporations is the concept of limited liability that defines what a corporation is. It is a privilege granted by the government that eviscerates both legal and moral responsibility for what the corporation does. This gutting of legal (as well as moral) responsibility for decisions that end up causing losses – as well as real harm to real human beings – creates a kind of sociopathic outlook, if a non-human thing such as a corporation can be diagnosed in this way.
Just ask Ed Bambas.
Luckily, he won;t have to work anymore, courtesy of the GoFundMe effort. But how about the rest of those pensioners whose checks never came – and never will?
. . .
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Eric, this is not corporatism but fascism. It’s a system when they can do anything to you, symbolized by a bundle of sticks. Communism is the same, just looking at it from another angle (ownership, i.e. you have nothing). Two sides of the same coin. They’ve been building this system a long time now, and are almost there. It’s everywhere now, doesn’t matter which country.
We should call things by their proper names.
[…] https://www.ericpetersautos.com/2025/12/09/remembering-the-unpensioned/ […]
People are not generally forward-thinking enough or responsible enough to plan for a future when they are unable to work.
So what happens to the elderly when they haven’t planned for old age? Is it society’s obligation to take care of them? Today’s society answers “yes” to that question.
In the past, family or church would take care of their elderly. Today, the burden is placed upon all of us in this socialist society.
I’ll bet those executive bonus checks cleared just fine
When I was in school, I worked in the warehouse at a Hechinger hardware store. One of my coworkers was just like this dude. He retired from Peoples Drug, who did the same thing to him when it went tits up.
That’s unbelievably wrong and cruel.
It’s in the works for us Gen-Xers. You have to fight tooth and nail for social security, which I’ll be surprised if I see a penny. We were told that 401ks would be the answer, better than a retirement plan. And now, after 30 years of contributing to one, they are coveting those as well.
I guess they are better, in a way, since they are probably harder to get screwed out of. Doesn’t mean they won’t try.
Amen, Pat –
It’s all about getting us to pay – and then denying payment. I realized this about “health care” back in the ’90s and I always though the same about SS when I was in high school back in the ’80s. Once you recognize what it is, you can minimize the damage by never putting any money into “health care,” avoiding debt and assuming every cent you were forced to pay into SS is long gone.
401(k)s are going to crash. They have to. The Dow Jones is now 48,000. It went from 14,000 down to 6,000 in 2008-09. They’ve simply reinflated the bubble and now it’s ten times bigger than it was.
The “shtock maaar-ket” is the biggest Ponzi in human history.
So-called Security is insolvent and the problem is bubbling up to the surface.
So here’s my prediction, the stonk market will tank hard, right about now when the boomers are mostly through the chute and we x’ers are coming to the plate.
When the average moron sees his 401k and IRAs evaporate, there will be a great hue and cry for big daddy to fix it. And they will, the 401k plans will all be converted to government IOUs, and the average Schmoe will shuffle off grateful for a plate of GMO gruel, maybe with some bug meal. And look at how far socialist Canadia is ahead of us, learn to appreciate the acronym MAID (hint, there is no sexy French costume involved).
It takes a lot of experience to get this cynical.
I have not saved a dime for retirement, “X”. Not into an IRA or a 401-K. As an X-er like Eric, I know good and well the entire system is going to crash and burn, and there will be no retirement for me. Social Security will be gone, and I will not see a dime of the money I paid into that. Even if I had money in a 401-K, the money would either be worthless (due to a worthless dollar via hyperinflation), or the Feds would seize the money to pay down the national debt, and hand me an equally worthless “IOU”. Better to just spend the money now while it is still “Legal Tender” (ha ha). I even told my old, one timer friend to spend her 401-K money on real assets while she can, and warned her that one day, her money will be gone.
Ringing in the background: “None of what is happening is normal or naturally occurring. It’s part of a plan to enslave the world in a digital gulag, where your CBDCs will be doled out according to your subservience and maintaining the proper social credit score, and everything you say, type or do will be monitored 24/7 by the ruling totalitarian oligarchs who have society’s “best interest” at heart. Wait until they pull the plug on the financial system and your 401k is vaporized/ bailed-in to “save” the system. They will own everything and you will own nothing. We are already more than 50% down this path.” …
https://www.lewrockwell.com/2025/12/jim-quinn/mass-collective-societal-suicide/
Amen, Shadow!
They will devalue or just take everything that isn’t physically in our possession – and they may take that, too. It may have been sound to contribute to 401ks and such for those who are already long retired. But for those of us not yet retired, the probability is we’ll end up with nothing beyond whatever pittance (UBI, etc.) we’re doled out – and the doling out will be tied to compliance. The only way to avoid this is to figure out a way to live that does not require a high income, as by owning real property (not paying a mortgage on real property) and being as self-sufficient as possible.
RE: “to figure out a way to live that does not require a high income, as by owning real property (not paying a mortgage on real property) and being as self-sufficient as possible.”
The 1% do that, I think. A few guys in the middle might be doing that? Or, think they are.
The other 98.4%?
Anyway, I read someone said, not, ‘self-sufficient’ rather, ‘self-reliant’.
As, almost nobody, makes their own salt.
‘Gandhi Clip on the Salt March (teaching clip for non-violence and direct action)’
https://www.youtube.com/watch?v=WW3uk95VGes
I have saved many many dimes for retirement, although I have not put most of them into a 401(k) for fear of “market” overvaluation.
But I am getting hammered by deliberately low interest rates and deliberately inflationary policies due to money printing. Probably 40% of what I have saved as been stolen by this.
Brother, you need to save in silver dimes. And silver quarters, half dollars, and silver dollars. THOSE aren’t being eaten by inflation.
Not so sure our pMs aren’t being eaten by inflation. But those old dimes and quarters sure do make nice music jangling around in your pocket.
Still….Nowhere else to put surpluses if you want little risk. Since we are about to enter the mania phase of this bull market, I need to make a list of big ticket, hard to get items I would be willing to draw down my stack for.
I used to think the market would reset, too, but once I realized that it’s all Cantillon effect of how money is created, the market will only reset if they stop the printing presses. Which ain’t happening.
Could be worse, I guess. They could send out stimulus checks and set off another round of inflation of consumer good prices.
The Cantillon effect could be something we could work with. Set up the system so that new money hits wages before it hits everything else.
But the people in charge don’t want that.
Because they want it all for themselves.
It’s unfair that public sector employees don’t get screwed when their employer over-promises benefits, unlike the private sector.
Where I live, our public pension systems are about 75% funded, meaning they’re 25% short of capital for meeting future obligations. This amounts to nearly $300 billion.
When the unions (teachers, cops, bureaucrats) negotiate with the state, the state offers promises which aren’t funded, and the unions accept these offers, both parties hoping that some money gets discovered in the future. The can gets kicked down the road immediately.
Whenever there’s a pension crisis, our taxes go up, or more of the general fund gets directed to pensions. In CA, our constitution guarantees the pensions ahead of pretty much everything else, like fixing roads or paying active teachers or cops.
“In CA, our constitution guarantees the pensions ahead of pretty much everything else, like fixing roads or paying active teachers or cops.”
Same with Illinois. One of many reasons we chose the smaller paycheck to stay outside of Illinois.
If people remember the 2008 financial meltdown, there is a lot of blame to go around both Democrat and Republican. However, one group escaped blame. How and why, this was not talked about and why legal action was not brought I don’t know. It was the Bond Rating companies of Moodys, Standard and Poors, and Fitch. They all gave AAA ratings to collateralized debt obligations (CDOs) and Credit Default Swaps. These rating companies had no idea what was backing these securities (your deadbeat brother-in-law buying a McMansion) and got away with murder. If these firms had rated these securities as high risk or even callout no rating (no way to know), I don’t think the financial collapse would have happened or just a garden variety recession for a few months. Maybe people would have only bought a house they could afford, not go speculating tulip mania over housing prices increasing by the month. These firms should have been sued out of existence. Why do they have a charter for rating bonds anyway? Know someone from Yale and Harvard? Why not Hans Gruber Bond Rating Service. At least I wouldn’t rate a bond without knowing what is backing it.
Moreover, if anyone noticed, there was some personal vendettas taken when Goldman Sacs ensured Leyman Brothers was taken out, then they cleaned up the dead carcass.
Next to the pandemic, this was the most corrupt time in America.
Absolutely Hans,
When everything crashed in 2008 and lots of people lost their homes but all the banksters got bailed out and then to rub salt in the wound they gave themselves bonuses. Not one of those rat bastards went to jail or even paid a fine. I remember our dipsh*t Clowngress critter remarked at the time that his calls/mail regarding a bailout were running two ways: “NO” and “Hell No”, yet he ended up voting for it anyway. Shows who our “Representatives” really represent, and it’s not us. As George Carlin accurately said “it’s a big club and you’re not in it”.
“When everything crashed in 2008 and lots of people lost their homes but all the banksters got bailed out…”
Did not happen. They got essentially a bridge loan, and paid it back. Some people might have been able to carry an underwater mortgage with a 1-year bridge loan, but not many. And of those who could, most would be better off taking the loss before/instead of bankruptcy and plowing whatever they could into a house in currently deflated status, rather than wait for their old house value to recover.
Most people did not realize just how huge an opportunity 2008-9 was. And it made them fiat poor, bitter and cynical, instead of making them fiat wealthy.
Hi Steve,
Here’s a true story: I used to live in Loudoun County, VA – which is a suburb of DC. I was maybe five minutes from Dulles airport. I bought my little house in the mid-’90s for $150k. It was a nothing-special little house that needed a lot of work, but it was my first house and I was very happy to have the keys to it. By the early 2000s, the “value” of houses in my neighborhood had more than doubled. It was obviously a bubble I knew people who took out equity lines and bought new cars; stuff like that. I put the money I had into fixing the place up and sold in ’03 and used the proceeds to buy the house I live in now. Two years after I sold my old house, the new owner got foreclosed on and the “value” had dropped by something like 30 percent; dude took a huge loss. I am glad I was smart enough or paranoid enough to get out before that happened!
Eric, it is not paranoia to listen to your little voice. It is called intuition, logic and risk reward is always based on pass experience.
I started cashing in the minute I turned 60. I am half way to recouping the money I send the criminals.
Excellent, Nova!
I plan to do the same as soon as I can, too. Assuming I still can…
Absolutely! Buying into a bubble sucks. The biggest reason I think the Fed must be abolished.
Hi Mike,
One particular banker Kerry Killinger of Washington Mutual deserves special recognition for being the dumbest banker on the planet. in 2008, he came late to the mortgage-backed securities game and bought a bunch of MBS’s just as news of these was leaking out from Goldman Sachs and other sources that these securities were worthless.
Which also begs the question of today as to who is reviewing solvency and providing the public with info on what national and regional banks are high risk and which ones are well-diversified and safe…answer: no one. Same reason Moody’s et al are rating Germany’s bonds as AAA right as we speak as their debt ratios go through the roof. Because if they told the truth we would take our money and run.
“Washington Mutual’s (WaMu) failure in 2008 was due to its aggressive, risky subprime mortgage lending under CEO Kerry Killinger, who, along with other top executives, ignored internal warnings and failed to implement proper risk controls as the housing market collapsed. While management faced scrutiny and lawsuits for reckless practices, regulatory failures by the Office of Thrift Supervision (OTS) in overseeing WaMu, and broader systemic issues in the financial crisis, also contributed to its collapse, leading to its takeover by Chase Bank.”
This is a reminder that while government in America was sold to us as a necessary evil to protect individual rights, in reality it is a mechanism to place the many under the control of the few.
The average serf has his labors taxes, the left over taxed at the point of purchase, his already purchased properties taxed, rules put in place by bureaucrats to control every facet of life.
This ensures the serf must keep his place as a cog in the machine, toiling away with the promise that one day he may rest and not be broke.
So long as he toils, he lives in fear of being bankrupt and homeless. He must comply. Fighting back is not an options because he can’t afford it.
Meanwhile, those in charge are insulated from personal liability from negligence and actions. There is a different set of rules for the rulers.
Land of the free.
Corporatism is not always a bad thing. The “Most Evil Regime in History,” Nazi Germany, was a corporatist state but 88-year old Germans were not working minimum wage jobs to avoid homelessness. (There were other significant defects of the regime to be sure but that was not one of them).
You do not see 88-year old Japanese losing their pensions, nor do you see 88-year old Israelis working to avoid being homeless.
The fact is that the American “capitalist” system is rigged to fuck average people over, and to enrich the rich even more, and it is justified by calling the victims “lazy” or “stupid.”
Other nations are more nationalist and take care of their own people. In the U.S. you are merely a walking dollar sign to be exploited, and after you are no longer useful or you’ve been ripped off and have nothing left to steal nobody gives a shit about you.
Ah-hem: Corporatism – IS – always a bad thing.
While you might not see, “88-year old Japanese losing their pensions, nor do you see 88-year old Israelis working to avoid being homeless” you gloss over the unseen: who pays for that.
It’s the broken window fallacy.
“Let us accustom ourselves, then, to avoid judging of things by what is seen only, but to judge of them by that which is unseen” …
http://bastiat.org/en/twisatwins.html
“I’ll gladly pay you Tuesday for your labor today.”
This country needs to get past this idea of a benevolent employer, benevolent government and benevolent insurance company. We allowed ourselves the illusion of complexity in all these different systems, that they’re too complicated for the average person to figure out. Mostly due to people who are paid to make markets and investing overly complicated. We believe that we’re just too stupid to know how to buy a health insurance policy, so we outsourced it to the HR department. HR did a lousy job of picking plans, so then we complain to government, because ??? Then government picks even worse plans but backs them up with guns and massive subsidies.
We outsourced retirement, in the form of employer pensions. The pensions were mismanaged, so they went away. Then came the 401(k) plans, that we’re told are lousy investments, but HR made the selection and that’s that. Just wait until the boomers start really drawing down their 401(k) accounts. Watch what happens to the stock market when there aren’t any buyers. Pretty soon people will start to complain to government about the “failure” of the “free market” and an eager government will take that over too. Well, not really take it over, just make it more expensive and difficult to obtain.
They say Americans are lazy, and with that I agree. People who won’t take 15 minutes a week to see what’s going on with their retirement accounts, won’t do even a little research into investments, or take any action other than trust someone else, well, they’ve got what’s coming to them. Too bad they’ll find sympathetic ears in Washington, all too happy to “help” at the expense of people who did it right.
Excellent synopsis, RK. 👍
“Benefits” were established as a means for employers to avoid taxation. It also locks in employees to a job that they may not want by making it complicated to find affordable healthcare and time consuming to transfer retirement accounts. Then of course, there are the RSUs that one has to sit and wait for them to be vested. The government then tortures the individual on the tax consequences of it all.
I thought benefits, at least health insurance, were originally instituted in the wake of FDR’s wage and price freezes during WWII. Humans being what they are, found their ways around FDR’s limits; since they couldn’t offer more pay, they offered benefits instead to get around FDR’s diktats.
We saw the same thing during Nixon’s wage and price freezes during he early 1970s. For example, butchers would make a minor change to a particular cut of meat, give it a different name, then jack up the price.
Hi Mark,
It actually started with The Baylor Plan, which was a small teachers union out of Texas in the late 1920s. The Baylor Plan became known as Blue Cross Blue Shield. This plan then spread to other union industries like mining.
You are correct that more employers did offer it during the wage caps in the 1940s, but it really took off in the 1950s when the IRS exempted employer paid plans from federal taxation.
Contrary to popular belief, this sort of thing is not new; in fact, IRAs and 401k plans were created back in the 1970s as it was becoming clear that pensions were being mismanaged. In fact, Las Vegas was built with money in the Teamsters pension fund.
Hi Bryce!
This is why I’d never “invest” in a 401k or similar. Not in this context. I fully expect them to be defaulted on, too. I think people are better advised to live debt-free to the extent possible and to own as many tangible things of value (land, coins) as possible.
Hi Eric:
Whether or not the money is in a 401K or invested in tangible objects you are still planning for the future. I’m vested in a pension plan but also have savings in various forms that “should” cover me. But if things get really bad I suspect I’d wind up face down in a ditch with all that entails.
The reason we remember the past with fondness even if it was hard is because we survived it and had hope for the future. Nowadays I’m less hopeful as I look around me.
Amen, Landru –
We no longer live in an honorable society. Not that things were perfect in the past, but – generally – people could count on such things as pensions and also Social Security. Now, they no longer can. Mind, I am not defending SS; just making what I think is a self-evident observation that it is unlikely that people my age and younger (GenX and Millennials) are going to get what was promised, either. The benefits will be reduced or the retirement age raised up; either way, we won’t get what they said we’d get. I always assumed this to be the eventuality and planned accordingly but many haven’t and while that might have been naive of them, it does not justify screwing them over – twice. First by stealing their money during decades of working years and then telling them You Lose! when they no longer have decades (or even years) left to work to recover what was stolen.
Oh, we’ll get what we were promised. If your socialist insecurity statement says you’re entitled to $2000 per month, you’ll get your $2000 per month. Problem is is that $2000 will buy you a loaf of bread and nothing else.
Exactly! Contractual obligations are will probably remain.
What’s likely to happen is that those contractual obligations won’t cover the cost of living
Whether or not they lost their pensions/ benefits or as Jim points out only part of them a smart person plans for worst case scenarios. This of course means living below your means even though you can afford to keep up with the Joneses of the world and investing/ saving for the future.
While you can recover if you’re young and poor from adversity it’s a lot harder when you’re old and poor with health problems.
Or as that old saying goes: “Plan the work and work the plan”.
Some background:
The transition from corporations obtaining a specific legislative charter to simple registration on demand occurred through a series of “general incorporation acts” in the mid-19th century.
Early 19th Century: States began experimenting with general incorporation laws to encourage specific industries and combat corruption associated with the special legislative process.
1811: New York was the first state to adopt a general incorporation act that allowed for free incorporation with limited liability, but only for manufacturing businesses.
Mid-1840s to 1860: The majority of U.S. states and territories enacted and retained general incorporation statutes, creating a simple administrative procedure where firms could file a certificate with a government office to become incorporated.
Delaware emerged as a preferred state for incorporation in the early 1900s, particularly after 1911, when it began offering more business-friendly laws than New Jersey, which was cracking down on trusts, cementing its reputation with stable, specialized courts and flexible corporate structures. — Google AI Overview
So-called ‘Joe Biden’ was Delaware Corporation Man to a T, until his mind went and he started mumbling incoherently. 🙁
And, let’s not forget the rent demanded by local GovCo so he can live in what he thought was HIS house. It never ends.
Pensions are a thing of the past, and it’s likely that retirement will soon enough be a thing of the past as well. Consider the following from Google AI: “In ancient history, workers did not typically retire in the modern sense; people generally worked until they were physically unable to do so, or until death. The concept of widespread, leisure-filled retirement is a relatively modern invention, emerging only in the late 19th and early 20th centuries.” Instead of being reliant on corporate pensions or government social “security,” Americans need to disavow the notion of retirement and content themselves with working through their old age. And like it or not, if Communism is indeed coming to this country, people will be forced to work until they die at any rate.
Hi Jason,
I personally do not have any wish to retire as I enjoy my work. That said I’d like to be in a position to not have to work. I think this distinction is important. Were it not for property taxes and income taxes, I would have achieved this years ago. But I will never achieve it, probably, because the rent I must pay on my paid-for house demands I earn income – which will then be taxed, leaving me with less to pay the rent (property taxes) and for food and so on.
Agreed, sort of, with some caveats.
I think for me what would be ideal, would be to be able to sort of slow down and be more selective about the projects that I take on as I age. I don’t like the idea of retiring because (1) it’s often fatal and (2) it just doesn’t compute. I need the structure and the stimulation; I guarantee that if I’m forced to retire I’ll either get another job or make one up for myself. I’d get bored otherwise.
Pensions are not “a thing of the past” if you work for the government, especially as a teacher or a cop or soldier. If you have one of those pensions it’s better than hitting the lottery.
X files,
Suggest you add Firefighters…(e.g. Houston FD, District Chief with 35 years service)
YIKES……You don’t want to know..Good Night and Good luck…
Glad I’m 69 and bailing on this place SOON!
Indeed true, but the nature of the work changed, and reliance on extended family was the real social safety net. The young and able do the hard jobs, and the old and feeble can still tend the fire and look after the infants and toddlers. A harsh simple life, but entirely sustainable. What we’re doing now is complex, and not sustainable. Only 100 years of eating the seed has made it seem normal and sustainable.
GM’s pensions were not totally terminated, according to this Google AI summary:
Main GM Pension Plans: The government bailout prioritized keeping GM solvent, allowing its primary pension plans (hourly and salaried) to continue with GM, thus protecting most benefits and preventing a massive transfer to the PBGC.
Delphi Pension Plans (Spun-Off):
Unionized (Hourly) Workers: GM had guaranteed to “top-up” these pensions if Delphi went bankrupt, so their benefits were largely protected after the Delphi plan was terminated.
Salaried Workers: This group had no such GM guarantee. When Delphi’s plans were terminated, the Pension Benefit Guaranty Corporation (PBGC) stepped in but paid benefits only up to statutory limits, resulting in major cuts for many.
Health Benefits: Alongside pension cuts, many retirees also lost health benefits (like dental/vision) or faced higher costs, though separate VEBA trust funds were created.
Although Ed Bambas quite likely lost his health benefits, I’m skeptical of the claim that his pension ‘disappeared.’ GM maintained those plans. And had they failed, Big Gov’s PBGC would have stepped in. But they didn’t.
If I remember correctly, the UAW got a big chunk of “new” GM stock from Obama under the terms of the bailout.
Bondholders of GM, many of whom were institutions managing 401(k) plans and pension funds for workers at other companies got stiffed.
Obuma has gotten stiffed more than one time.
Oh, Big Mike, Oh, Big Mike…
This is exactly the issue, and people need to pay more attention to it. There were several groups that the Obama maladministration gave all the money they screwed out of bondholders — UAW, the US Gov and Canadian Gov pension plans, and CALPERS.
How’s that go — It’s a big club, and Ed Bambas ain’t in it.
My dad’s pension from Bethlehem Steel was taken over by the PBGC (which immediately made the trust insolvent, but that’s a topic for another day). He gets about 1/2 of what BS promised, and lost the widow benefit, so when dad dies so does his pension. One could argue that the widow benefit was probably over the top, but I’m sure if mom thought she wouldn’t be taken care of after dad passes on she would have been a lot less caviler in spending “her money” when she worked.
This was a massive reduction in their quality of life, and a slap in the face to people who put up with a lot of bad management decisions in the 70s and 80s.
Amen, RK –
Whether the benefits were “over the top” (i.e., “too generous) is beside the point in that these were contractual obligations reneged on. People planned on receiving what they’d been told they would get and screwing them out of it is bad enough; it is much worse when the person screwed is over 60 and thus not in a realistic position to “start over” and recover what was lost. Also – morality aside – it is a very dangerous thing to do to people because of the despair and rage it fosters. This is how we end up with Communism.
At least with Bethlehem everyone saw the train wreck coming, and most people had time to plan. Many of my father’s coworkers were able to take a lump sum pension early on in the downsizing, and were usually young enough to find something to do on the side for a few years. He was a little too young to be eligible for a lump sum payout though. At least he got something, but no thanks to the idiots in Martin Tower.
Under the ERISA Act of 1974, pensions are supposed to be fully funded … and brought up to full funding if they aren’t. But fully funded status can melt down fast. This is about to happen again:
‘A stock market decline as severe as the one experienced from 2000
through 2002 can have a devastating effect on the funding of plans that
had invested heavily in stocks.
‘For example, the Bethlehem Steel defined-benefit plan had about 73 percent of its assets (about $4.3 billion of $6.1 billion) invested in domestic and foreign stocks on September 30, 2000. One year later, assets had decreased $1.5 billion, or 25 percent, and when the plan was terminated in December 2002, its assets had been reduced another 23 percent to about $3.5 billion.’
https://www.gao.gov/assets/a110279.html
But guess what? Big Gov exempts Social Security from ERISA. SocSec is less than 20 percent funded, and headed to zero in ten years.
This is what happens when people entrust their future to 535 rum-soaked, cocaine-smudged Uniparty Congress Clowns.
Over the top? Not at all. It was earned pay. I am sure Mary Barra and any executive flying in a private jet does not consider their pay or benefits to be in the least over the top. I’m wondering if your dad also may have been offered the option to take a slight pension reduction in order to choose the widows benefit option that was later taken away from him. Which would make it even worse that they took that away.
You have something of an inside track that apparently doesn’t make it into the official analyses — what exactly happened there? Seems to me once the taconite mills in the Range were all set up, and freighters could haul to Gary and points east, and they were mostly updated or updating to electric, and had lots of steel-using customers, what the heck happened? Labor costs don’t begin to explain it — that is way too much capital to just let go to rust over a few percent increase in wages.
RK,
Bethlehem Steel ? My Houston Honey’s home was in Mckeesport, PA!
Pittsburgh is a “Diamond in the rough”.
The view from “Mt Washington” looking down (via the Duquesne Incline) at Point Pitt
is geographically Kool plus the start of the MIGHTY OHIO!
The Rep is earned ..The “Buckeye River ” contributes over 2/3 s of the Lower MS River water flow to the “Mighty Miss.
Hi Jim,
Mr. Bambas took the buyout which forfeited his pension. My mother did a similar thing back in 1995 when the large telecommunications firm she worked for wanted to get rid of “the old people” nearing retirement. They offered voluntary buyouts. Basically, you took it. The alternative was you would be involuntarily fired if you didn’t.
Thanks; that makes more sense.
from other sources it is reported he was an executive with Delphi, not GM.
who took his pension benefits as a lump sum when he retired, well before GM’s bankruptcy.
though I’m sure he lost any health benefits in the bankruptcy plus had to burn through that lump sum due to his wife’s terminal illness.
A corporation is a legal fiction but the courts have ruled it has the same due process rights as an individual. This is the heart of the problem. Years ago Gerry Spence, who defended Randy Weaver, advocated to change this and it would have made corporations responsible for their actions. But the system is too powerful for any real change.
Okay, I was agreeing with you wholeheartedly up to the last paragraph. Exactly, how does an LLC define what a corporation is? An LLC is an entity structure and stands for Limited Liability Company. Its setup, compliance, taxation, and dissolution is completely different than that of a corporation.
The sentence can be fixed by deleting ‘(LLC)’. Corporate limited liability means owners (shareholders) and investors are generally not personally responsible for the company’s debts or actions — for C-corps, S-corps, and LLCs.
It allows people to not be responsible for harms they cause by using the “LLC” as a legal shield. Or, am I missing something?
Hi Mark,
Liability protection is only one benefit of establishing an entity structure. I would argue the most important one is the continuation of a business. Without entity structures and the transfer of stock and ownership many businesses that we still use today would be gone. McDonalds would have ended with the death of Ray Kroc. Actually, I would argue McDonalds wouldn’t even exist because Kroc was established as a franchise under the McDonalds Brothers organization. Walmart would have shuttered after Sam Walton passed instead of it being passed onto his children. Banks will lend to Walmart, but would they have lended capital to Rob, Jim, and Alice Walton as individuals?
I won’t bore you with taxation structures or the raising of capital as other considerations for certain business structures and strategies.
Corporations and LLC’s do the same thing. They limit an individuals liability from harms caused by those that run/own/profit from those entities. All are owned and operated by human beings. The humans should be responsible. However they set up the rules of the game to benefit themselves, not the rubes (you and I).
To quote/paraphrase a very wise philosopher. “It’s a big club and you are not part of it”
Merry Christmas.
Hi Ugg,
Except you as a lawyer and me as an accountant know full well that any Tom, Dick, or Harry can establish an entity structure to protect their assets. The protection of assets is not only for the wealthy. Are you also against trusts? Is your law firm not structured as a PLLC or another type of entity? My accounting firm is. My real estate property is and my personal assets are.
We live in a sue happy society. Do you disagree?
Agreed. Any individual with any decent amount of assets ought to consider incorporating and using all legal means to protect themselves.
Courts are just…shills for increasing control. Consider the Bill of Rights. Why are these prohibitions also not applied to corporations? If anti-discrimination laws can be applied to private business and schools that accept government funding, then by the same logic, why cant courts rule that government created business entities are also subject to the bill of rights? Especially if they do business with the government, or receive funding or special treatment from government regulators? Is there any real separation between government and business anymore, since the entire corporate structure is totally legitimized and regulated by all levels of government? Google could not exist in its present state without state support. Huge stores seek permits and tax breaks to build, Amazon uses public roads and all kinds of corporate costs are shoved onto the “private” sector. Where is the divide from government controlled and private; private meaning free from government oversight? All media companies are government controlled. Practically everything is. So why have the courts not said, Gee, look at all these tentacles of government control end-running around the Constitution by pretending they are Private, when in fact they act in concert with their Government buddies, we’d better start applying the Bill of Rights or we will end up as a Fascist state?
We know why.
“If anti-discrimination laws can be applied to private business and schools that accept government funding”
If.