(September 30, 2013) – General Motors’ (GM) vice chairman Steve Girsky has ruled out negotiating pension terms with unionists until 2015.
Although there are no ongoing talks with the United Auto Workers (UAW) union, tensions are running high after the 2011 valuation of GM’s pension obligation rose to $71 billion, exceeding GM’s market value by $20 billion.
Speaking to Reuters, Girsky said a lot of education was still needed before any sort of deal could be reached.
“For the UAW to pull the trigger on that, it would seem to be something that big and visible would probably have to occur around bargaining,” he added.
GM and the UAW agreed in 2011 to discuss ways the US’s top automaker could reduce the risk of its pension shortfall, viewed by credit ratings agencies as debt and a concern to GM investors.
It now appears that those discussions will be left on the table until 2015 at the earliest, according to Girsky.
The 2011 agreement did not detail specific steps, but analysts suggested likely options would include allowing UAW-represented retirees to voluntarily take lump-sum cash payments in exchange for giving up pension claims.
Another solution would be to spin off GM’s blue-collar pension obligation to a third party, something GM did in 2012 when it transferred its pension obligation to 118,000 white-collar retirees to Prudential Financial, cutting $28 billion of the total US pension liability in doing so.
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