Legacy costs - where did the money go?
Maybe I should have studied economics back in college instead of what I actually majored in. However, I am old enough to recall the good ole days (pre 401k) when if you had a traditional defined benefit pension plan, the individual AND the employer contributed set amounts of each year's salary. Over time, by pooling all the money pouring in (or at least supposed to be pouring in) the company's financial managers could get better returns on investment of retirement monies than individuals could on their own.
Now, at times many an employer has delayed or deferred putting in their share of the money. Still, that's what audits were for, and there had to be a good reason & it supposedly wasn't something employers could do regularly - at least not without going back to the employees and getting the whole thing re-worked.
IOW, when it comes to the "legacy costs" GM is so burdened with, is it at least possible they either weren't putting aside as much as they were supposed to, or perhaps over-promised what they would be able to deliver? In the latter case (GM setting aside the amounts they said they were doing for pension & retiree health care costs), I guess that means they weren't being upfront with the employees in the sense that in order to deliver on their promises, the employees would need to be kicking in more than was being asked of them. Now, that's not exactly something that would make negotiations with the UAW pleasant, but then maybe, just maybe various honchos at GM knew a problem was building, and like Congress with prolifigate spending in the last 30 years, kept kicking the proverbial can down the road - hoping that by the time the sh!t hit the fan they'd be long gone & wouldn't even be around to be blamed for the mess. IOW, successive GM CEO and Boards of Directors knew damn well a big problem was brewing, but chose to ignore it.
Anyway, I was just wondering. Perhaps someone who knows much more about this than me can set me straight.