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October 18, 2005

Where are Investor Givebacks at GM?

During decades of General Motors profitability, investors drained the company of dividends, money that could have instead been invested in new technology and fuel efficiency research.

So now that it turns out in retrospect that the company couldn't afford all those dividends, why isn't the company demanding that those investors give back some of those dividends to support the company?

Instead, retirees who were promised medical benefits after they retired in those same profitable years are being told they will have to give back those benefits::

"We fought for everything we got," said Ray Bailey, 75, a former G.M. electrician in Belleville, Mich., who along with his wife, Dorothy - and the Logganses - worked at the G.M. Willow Run Transmission plant in Ypsilanti, Mich. "We took benefits instead of wages a lot of different times, so they didn't give us anything. We earned it.
So over those decades, both investors and workers were promised and given various economic benefits.

But the company is only "clawing back" benefits from workers, not from the investors who made tens of billions of dollars over those same years.

One lesson of the recent corporate attacks on worker pensions and health benefits is that unions can't trust companies to honor their contracts. For decades, there was an ideological assault on union-run pension funds like thsoe run by the Teamsters. No doubt there was some corruption in those funds, but the full-scale corporate looting of pensions and medical funds by the airlines and now auto companies makes the mafia look like pikers.

Posted by Nathan at October 18, 2005 06:24 AM