GM's Wagoner Gets Gold Mine, Rank-and-File Get the Shaft

A group of General Motors white-collar retirees protested their reduced pension benefits outside a July 14 speaking engagement by President Barack Obama at a community college in Warren, Mich.

Meanwhile, former GM Chairman and CEO Rick Wagoner is quietly set to became one of the company's newest retirees. Wagoner fought the idea of bankruptcy and was unceremoniously forced out by the president's auto task force.

Unlike some of the members of the GM Retirees Association, Wagoner probably won't ever be forced to choose between buying groceries and getting his prescriptions filled.

According to a written statement following the Obama protest, Rick Knoth, GMRA regional vice president for Michigan, said that's the situation some GMRA members find themselves in, since their pensions have been cut. He was not commenting on Wagoner's situation.

However, the contrast is impossible to miss. Wagoner will be allowed officially to retire effective Aug. 1, according to a filing with the SEC from Motors Liquidation. That's the new name for what's left of Old GM, since New GM emerged from bankruptcy earlier this month.

The document says that on July 8, Wagoner entered into an agreement that will pay him a pension of around $74,000 a year for life, plus another $8.2 million, to be paid in annual installments of about $1.6 million for the next five years.

The General Motors Retirees Association said that since GM went bankrupt, some of their benefits have been cut two-thirds, and dental, vision and long-term disability coverage have been eliminated entirely.

"GM's non-UAW retirees are ordinary people. We aren't rich. The huge reductions in our benefits are a financial crisis for many of us," Knoth said.

For sure, Wagoner's pension got cut, too. The SEC filing says his pension was reduced "consistent with the ERP (Executive Retirement Plan) reductions implemented for the current Motors Liquidation retirees."

In other words, Wagoner is getting a small portion of what he would have retired on, if GM hadn't gone bankrupt on his watch. But it's a lot more than most GM retirees will ever see.