[quote=bearishgurl][quote=harvey]…Do a google on GM and “legacy costs” and you’ll see lots of info describing just how big the issue is. Every GM car still carries the cost (mostly healthcare) of employees who retired decades ago. Some estimates are as high as $2,000 per car! At one time a huge portion of these liabilities didn’t even show on the balance sheet…[/quote]
Uhhh, pri_dk, GM employees who retired “decades ago” are likely now on Medicare. How is it that their (exorbitant?) healthcare costs are wrapped into the price of a new GM vehicle today?
How many “decades” is “decades ago?” And …. more to the point, what was the average retirement age for a GM autoworker??[/quote]
You nit-picker 🙂
Some of the problems in this discussion is framing. The assertion was made that we’re currently paying for public employees that retired years ago. Yet a decade ago, most of the public employee retirement plans in CA were over funded. There was more than enough in the plans to cover all future obligations. The assertion isn’t necessarily wrong that we’re currently paying for employees that retired 20 years ago, but more accurately, we’re paying for recent investment losses, and insufficient funding over the last 5 years.
