The government wants to keep the automakers out of bankruptcy because it wants to maximize gains for employees. GM's pension, thank God, was actually overfunded last time I looked, so at least retirees won't lose the income they've planned on as so many do in these legacy industry bankruptcies--the PBGC fund top benefit is well under $50K per annum.
Reality:
A General Motors Corp. bankruptcy could become the Pension Benefit Guaranty Corp.'s biggest nightmare.
That's because the automaker could dump as much as $13.5 billion in unfunded pension liabilities onto the PBGC — the largest ever from a single company — if GM were unable to fund its U.S. defined benefit plans and terminated them.
The claim would be almost twice as large as the current record of $7.5 billion from the 2005 termination of the Chicago-based UAL Corp.'s United Airlines pension plans.
For this to happen, GM, Detroit, would have to terminate its plans and PBGC officials would have to agree to cover all the unfunded pension liabilities of the company's U.S. hourly and salaried plans. Together, the plans had a combined $84.5 billion in assets and $98.1 billion in liabilities as of Dec. 31, according to its 10-K report.
Can I have a high-profile job where I can babble whatever half-truths or misunderstandings that pop into my pretty little head? I'll work for less than McArdle and there will be fewer embarrassing moments because I'm not too lazy and smug to Google.
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