GM, The CAW and Pensions

Both GM Canada and the CAW are of the mind that if GM goes bankrupt, then "the government" will have to bail the employees out of an unfunded pension plan.

In Canada, a pension plan can be registered either federally or provincially. Fortunately for those of us Canadians outside of Ontario, GM registered its pension plan in Ontario.

Unfortunately for Ontario taxpayers, the provincial government is actually entertaining funding of the GM pension plan in the event GM goes bankrupt.

There actually is a fund in Ontario to cover exactly the issue of unfunded pension plans. The problem is that GM and the union, asked for, and were given, a permanent holiday from ever contributing to the fund because "GM was to big to ever go bankrupt."

GM and its unions now want access to the fund. Some of the contributors to this fund have said "hands off", using fairly strong words. One contributor made it clear his organization would consider an attempt by GM to access the fund "extortion" and they would look to criminally prosecute GM and the CAW.

While we agree, in principle, with that link between GM, the CAW and the legal concept of extortion, U.N.C.L.E is officially issuing the following statement, which we believe focuses on the business issue and establishes clear assignment of accountability:

"The issue of the GM pension plan is a private, commercial agreement between GM management, its employees and the CAW. The taxpayers of Ontario were not at the table for any wage, benefit and pension negotiations between the employer and the employee. The terms of the agreement are not in the public domain, nor were they subject to democratic, public governance and oversight. The taxpayer cannot be bound to the agreement morally nor legally. The taxpayers of Ontario neither have a claim to any benefits from the pension plan, nor do they have liability for any unfunded portion of the plan."

March 6, 2009

Hazen S. Colbert
Vice Chair
Policy, Intelligence & Communications
U.N.C.L.E.