The Detroit News
Detroit -- Two Ohio members of Congress urged the Obama administration today to ensure that General Motors Co. meets its pension obligations.
In a letter to Treasury Secretary Timothy Geithner, Sens. Sherrod Brown and Tim Ryan -- both Ohio Democrats -- urged the administration not to assume GM's underfunded pension plans.
"As a majority owner in General Motors, the U.S. government must not put itself in the pension," the pair said in the letter. "It also would be a poor outcome for the U.S. taxpayer to sell our interests in the auto sector, only to have the U.S. government to assume the unfunded liabilities in their pension plans."
The Treasury swapped about $42 billion of its $50 billion bailout of GM for a 61 percent majority stake in the automaker.
Last week, GM disclosed under new accounting rules, the company's worldwide unfunded pension liabilities are $27 billion as of Dec. 31.
GM's U.S. obligations grew by $3.5 billion to $17.1 billion as of the end of 2009, while it owes $10.3 billion for pension obligations elsewhere.
Treasury spokeswoman Meg Reilly said the department didn't have an immediate comment.
The Obama auto task force warned last year that GM's future pension costs -- which include $6 billion in payments due in 2013 and 2014 -- are "unsustainable" and would require GM to sell 900,000 additional cars each year to meet the obligation.
The fate of GM and Chrysler's underfunded pension plans has drawn more interest after the Government Accountability Office released a report on the status of the pensions.
The report said auto sector participants could lose as much as $35 billion if suppliers and automakers terminated pension plans and were assumed by the Pension Benefit Guaranty Corp.
The GAO report "raised a number of alarming concerns about the conflicting roles and responsibilities of the Treasury Department and the potential impact on retirement security in the auto sector."
Delphi Corp. terminated its pension plans in July, saddling the PBGC with a $6.2 billion liability for plans covering 70,000 people. Retirees and employees stand to lose $1.2 billion in pension benefits because of maximum benefit levels covered by the PBGC.
In a letter to Treasury Secretary Timothy Geithner, Sens. Sherrod Brown and Tim Ryan -- both Ohio Democrats -- urged the administration not to assume GM's underfunded pension plans.
"As a majority owner in General Motors, the U.S. government must not put itself in the pension," the pair said in the letter. "It also would be a poor outcome for the U.S. taxpayer to sell our interests in the auto sector, only to have the U.S. government to assume the unfunded liabilities in their pension plans."
The Treasury swapped about $42 billion of its $50 billion bailout of GM for a 61 percent majority stake in the automaker.
Last week, GM disclosed under new accounting rules, the company's worldwide unfunded pension liabilities are $27 billion as of Dec. 31.
GM's U.S. obligations grew by $3.5 billion to $17.1 billion as of the end of 2009, while it owes $10.3 billion for pension obligations elsewhere.
Treasury spokeswoman Meg Reilly said the department didn't have an immediate comment.
The Obama auto task force warned last year that GM's future pension costs -- which include $6 billion in payments due in 2013 and 2014 -- are "unsustainable" and would require GM to sell 900,000 additional cars each year to meet the obligation.
The fate of GM and Chrysler's underfunded pension plans has drawn more interest after the Government Accountability Office released a report on the status of the pensions.
The report said auto sector participants could lose as much as $35 billion if suppliers and automakers terminated pension plans and were assumed by the Pension Benefit Guaranty Corp.
The GAO report "raised a number of alarming concerns about the conflicting roles and responsibilities of the Treasury Department and the potential impact on retirement security in the auto sector."
Delphi Corp. terminated its pension plans in July, saddling the PBGC with a $6.2 billion liability for plans covering 70,000 people. Retirees and employees stand to lose $1.2 billion in pension benefits because of maximum benefit levels covered by the PBGC.
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