GM plans to freeze salaried workers' pensions

DETROIT - General Motors Co. (GM) plans to freeze its U.S. pension plan for longtime white-collar workers and give all salaried employees annual bonuses but not pay raises in an effort to hold down expenses, officials announced Wednesday.

The Detroit-based automaker said roughly 19,000 salaried workers hired before 2001 will move from a traditional pension with guaranteed payments to a 401(k)-type plan with contributions based on salary and bonuses. Employees hired after 2001, which represent about 30 percent of the company's salaried workforce, already are in that defined contribution plan.

The changes take effect Oct. 1, and workers will keep all pension benefits they have already accrued, officials said.

GM also said it would offer bonuses to all 26,000 salaried employees and release the amounts when it announces quarterly and full-year earnings Thursday. The company is expected to post a 2011 net profit of around $8 billion -- the best in its 103-year history.

GM vice president of global human resources Cindy Brinkley said the changes are geared toward increasing profitability and reducing risk.

GM, a little less than three years past government-funded bankruptcy protection that saved the company from financial collapse, is expected to top its record annual profit of $6.7 billion of 1997, when the pickup truck and SUV sales boom was in full swing. Earnings should set a new record despite total sales in the U.S., GM's second-largest market, near a historic low of 12.8 million cars and trucks last year.

The changes announced Wednesday include offering salaried employees an additional five days of vacation and eliminating a plan that allows them to buy up to five days.

The announcement follows other pay-and-benefit-related news from the other two automakers representing the Detroit Three. Chrysler CEO Sergio Marchionne said earlier this month that both salaried and hourly workers would get profit-sharing checks, but he would not reveal the amounts. Ford Motor Co. (F) said last month that it was giving pay raises and bonuses to 20,000 white-collar workers mainly in the U.S. and Canada.

[payasyougo]

Time for congress to go on 401k's. Retroactively. Just need a congress in place that works for the voter instead of the donor.

[jose_z1]

Why not cut the pensions of all employees? Why are only the non-union employees targeted for cuts? - did they not give money to Obama too?
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[venusvegasvada]

Screw doing the right thing, got to increase that shareholder value eh?

[fedup12]

I havent had a raise in about 5 years. And the raise at that time was tiny.

Havent had a real raise for about 10. But all my costs are going up.... Exponentially.

But I am glad to have a JOB.

[Lerianis4]

I wouldn't be in that situation. The fact is that there is a point where you have to say "Job or not, I am not bringing in enough money to support myself and my children/family! Time for the government to up the minimum wage or put into place some price controls on some items!"

[bobnjersey]

[The company is expected to post a 2011 net profit of around $8 billion -- the best in its 103-year history.]
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does that say $8 billion in profits is the best in gm's 103 year history ... is that what that says?

and to think that this is in the midst of obama completely ruining the country with socialism ... all religious freedom under complete assault ... and a communist/marxist terrorist sympathizer who wasn't born in the u.s. as the sitting president.

how is this possible?

are there any conservatives who can explain this? is there anyone that can make any sense of this?

something doesn't seem right here ... maybe it's the left wing 'lame stream media' spreading misinformation in an attempt to protect mr. obama by spreading untruths to the unsuspecting masses.

[fedup12]

Bob.... Toad is a bit slow... I dont think that he caught your SARCASM.

I did though.

[MariePearle]

This is why workers need a 401K-type plan or a Roth IRA, and not a pension. Pension plans are expensive and outdated.

[antoniof123]

Some of the posts here show just how far America as sunk in education. It used to be we would do research before shooting off our mouths I guess that some of you were educated in a cave.

SALARIED WORKERS ARE NOT UNION, THEY ARE BEING BROUGHT DOWN TO WHAT THE UNION ALREADY HAD DONE TO THEM.

Yes I ment it to be caps. For hard heads who either didn't read (most likely) or can't understand (another possiblility).

Some of you need to go back to school the reason this is happening is because years ago the corporate masters the CEO and other exec's decided to pad their pockets and give the union benefits instead of a raise thinking the will be long gone. So they did it and guess what they are long gone with their bonuses and the workers who need jobs have to take cuts because of greed.

I guess we deserve what we get.

[Freepress1111]

Funny how increasing profitability always means less money for workers. The only reason this isn't affecting hourly employees is their union. The company is reducing it's risk by following the trend and passing the risk over to workers.

[Godsmack4]

Agreed. Remember when companies used to come up with new ideas to increse profits? Now they just cut benefits or salaries. Classic corporate America. Soon not enough people will make enough money to buy the're products and they will go bankrupt. Nice.

[pake3]

Workers who are a critical cog in the manufacture of their autos are forced to "subsist" on less each year while their bosses (CEO, CFO, Board of Directors, etc) draw outrageous salaries, bonuses, outrageous retirements, Golden Parachutes, etc while earnings tank. In other words, they're paid for their incompetence and failures, regardless!

[venusvegasvada]

Here we go, further down the 10.00 an hour rabbit hole.

[helmyelsaid]

Lead to more profitability,less risks.