GM may suffer future sales backlash from thousands of retirees
GM retirees have been loyal GM fans, often purchasing more than one car, not to mention convincing others in their family and friend networks to buy as well. Like the GM reitrement plan, though, those days may be over.
Call it what you will, but in recent emails both the General Motors Retiree Association (GMRA) and the National Retiree Legislative Network (NRLN) consider the ending of the GM retirement fund a definite breach in loyalty. No doubt it is a throwing under the bus; and if GM can do this to its own, then imagine what might happen to customers over time.
For sure, it’s not a great image message for GM. You might even justify the move by General Motors Company (NYSE: GM) as financially prudent. Nonetheless, this financial reengineering has still soured the attitudes of a majority of GM retirees who have been sending emails to the retiree organizations in a grass roots effort to even protest before the government. Reason is, this kind of financial re-engineering will also create more pension risks to the remaining pension plans by eliminating PBGC protections. It will also significantly reduce PBGC premium contributions from companies.
Fact is, Ford offered lump sum buyouts as well. However, Ford did not take the low road by palming the entire pension plan into an annuity-based entity like Prudential. Even Chrysler has stated that it has no intention of ending its pension plan for salaried retirees.