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Monday, June 27, 2005

The Horror: No Cable TV!

From a recent Detroit News story about the coming benefits war between GM and the UAW:
Doris Wamsley, a 78-year-old widow in Flint, fears she'll one day have to
choose between cable television and prescription drugs.

I'm sorry but this example does not incite much pity from me. I myself don't have cable TV--I prefer to spend my money elsewhere.

There no choice between medecine and TV, and it was a really stupid example.

Another quote:
"There were smart people who saved their money -- and I was not one of them," said Sanderson, smoking a Marlboro in the living room of his tidy one-story home in the Cleveland suburb of North Ridgeville, Ohio. "It just goes back to being
stupid enough to believe we were going to get all the stuff we were promised."

Right! Now we are getting somewhere--how can anyone assume that things are never going to change? Just because GM promises lifetime benefits which are among the most generous in the corporate world doesn't meen you can count on them.

Any more than you can count on Social Security for your retirement. That's why I have a 401(k).

Don't get me wrong. I don't want to see widescale impoverishment of our aged retirees. However, the retired population is the most affluent segment, as a whole. And the economic destruction that will occur if GM goes under will be much more painful than adjustments to benefits now.


Anonymous said...

Let see...TV or the destruction of an American industrial giant?... ummm...thousands of jobs or the pleasures of 1 person... This is hard.

Big Ford Fan said...

AutoProphet, I'm a huge fan of your blog and respect your writing, but the example of the old lady and her cable TV was dumb enough on the part of the News Article that it shouldn't have been repeated.

Obviously the Anonymous poster didn't read farther than that.
This is about what the Union and the Company negotiated years ago and while it may seem excessive to people who don't have this type of benefit/retirement program, you have to look beyond that to the reality of what these people planned and expected.

If you were 78 and all of a sudden your benefits and healthcare changed drastically, you would be concerned. And think about it, if you were 78 Cable TV would be very very important to you.

I don't have the retirement package they do, but I don't gripe about it. It's not the fault of the retirees, it's the fault of Management and Union for letting these things get out of hand.

Be angry at GM and the UAW not some old woman who wants her cable and prescription meds.

I have a union pension, 401K and private anuity plus small savings. These and what's left of Social Security will be what I retire on.
I won't live like a king, but I won't be on the street either.

Anonymous said...

At the end, I can't really blame GM or UAW...It's just natural selection. The companies are trying to compete with government-backed industries overseas, and UAW is trying to get the best deal it can get for its members.

It will be painful and some will suffer, but it has to be will be done. Life is never meant to be fair.

Anonymous said...

Hey Prophet, don't be too sure of the 401k...

I'm not a betting man, but I am almost certain we can expect our beloved gov't to seize those accounts and leave a big fat IOU before it's all said and done. Just wait and see.

GM, Global Motors, is now in the implementation phase of a 30+ year plan. The UAW/GM 'battle' is just smoke and mirrors. Gladatorial distraction, if you will.

SD Wrigley, Detroit

Anonymous said...

The Auto Prophet said...

Mr. Wrigley,

If the Feds ever "nationalized" our retirement accounts, there would be something like a civil war. This is un-constitutional (an uncompensated taking of property) and such a move would be fought in the courts for a long, long time.

The Auto Prophet said...


I wasn't making fun of the old woman, as much as the newspaper for using such a dumb example.

Remember, even if GM cuts its health insurance benefits back drastically, those 65+ are still covered under Medicare and the new presciption drug benefit.

They are also covered by Social Security. If they planned just a little bit, a cut in retiree benefits would not be devastating.

Some UAW retirees are not in great shape, and need the help. But quite a few of them are very well off--summer homes, boats, RVs, etc. They have one of the best standards of living, as a segment of the population.

There has to be a balance--if GM collapses, the devastation to active employees and suppliers and the communities will be massive.

Anonymous said...

When did plans and expectations become reality?

The Angry Engineer said...

I fully expect the government to find a way to stick its hand into my 401(k) cookie jar sometime before I retire. Civil war? Hardly. I've got a National Guard base 15 miles away. 2nd Amendment rights have been eroded sufficiently that the government has nothing to fear from the people - they'd just sit by and watch as we killed ourselves.

With regards to the original topic, I think there's a pretty big wealth gap among the retired. While I agree that giving up cable TV isn't exactly a plunge into poverty, I think that GM has made a commitment to retirees that they must make every attempt to uphold. Until executive pay has been slashed and dividends suspended, then I don't think that retiree benefit cuts should even be discussed.

The Angry Engineer said...

Oh, yea, and may I politely suggest that letting a corporation walk away from its commitments and leaving an individual dependent on a government-provided service doesn't exactly meet the strict definition of "conservative". That new Medicare bill is a sham, and if its existance is used as justification for a company to walk away from obligations that were negotiated in good faith, then it is indeed one of the bigger pieces of corporate welfare that have been passed in recent decades. I am uncomfortable with the idea of this nation going a few trillion further into debt so that GM can walk away from its own poor business practices.

Big Ford Fan said...

AutoProphet, sorry about the tone of my last comment, it's just that this situation hit too close to home. My mother who was widowed just before she retired is now in her early 70's and the cost of medications has caused her to give up some of the little luxuries like Cable TV and Internet access.

She did not work for a big company like GM and had a 401K retirement account and social security, and even suplimental insurance, but just the same things have gotten tight for our seniors.

I appologize for the implication, the anger should have been directed at the news article.

This is a hot issue as you can see.
As for the government privatizing retirement accounts, I don't see it happening, but with the recent Supreme Court Decision on Eminent Domain in CT, nothing would surprise me.

I'm only 40 and retirement is about 20 years away (I don't have kids, so I can retire early) but I am concerned. Even with union pension and 401, as well as private annunity account and social security, I doubt I will be able to live in suburban New York or enjoy a lifestyle anything near what I live now. And I'm not JP Gotrocks.

Anonymous said...

welp, Im back mr. auto prophet....

So, heard anything interesting lately about the 401k situation?

Still think it wont happen?

S.D. Wrigley
Detroit, MI

The Auto Prophet said...

My 401(k) is getting hammered by the market, like everyone elses... but I still don't think they'll be nationalized, which is what you were saying.

GM isn't bent on global domination, at the moment it is not known if they will last another year.