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CruelNUnsual -> RE: Government Motors Is Selling The Hummer Division To The Chinese (6/4/2009 9:05:51 PM)
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quote:
ORIGINAL: DomKen
The artiucle is quite clear that the medical benefits funds were diverted to create profit to prop up the share price. Since I know the UAW has been fighting GM over this practice since at least the late 80's I see no way your claims could be correct.
Thats not what it says. All it talks about was accounting practices before the issuance of FASB Statement 106 in 1990. The writer doesnt have a clue about the value placed on those benefits in terms of wage reductions and obviously doesnt even know that the benefits were pre-funded in a VEBA. Post 1990 OPEB costs are accrued (reducing profits) and VEBA assets are off balance sheet. That doesnt in any way boost "profits". Like every other company with surplus pension assets in the late 90s GMs pension plan did generate "income", but that was REQUIRED under FASB statement 87.
I was the actuary that consulted on the accounting for the 1985 sale of Hughes Aircraft to GM, the reorganization of GM in 1996-1997, the sale of EDS in 1996, and the sale of Hughes Electronics to Raytheon in 1997..a deal solely made because of Hughes/GMs surplus pension assets. That deal was for $9.5 billion and there was $5 billion in surplus pension assets.
I havent worked for them since, but GMs VEBA accounting and funding were major considerations in that reorganization and in every bargaining agreement for the last 25 years.
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