musky
04-10-2009, 09:08 AM
CAW 'furious' at Ontario over pensions, Lewenza says
Ontario is abandoning its responsibility to retirees by claiming it can't guarantee the pensions of autoworkers whose companies have gone bankrupt, the president of the Canadian Auto Workers said Thursday.
Ken Lewenza said that the province's big mistake was allowing the pension safety net to go under funded in the first place.
"To suggest that retirees will bear the brunt of something they have no control over is just unconscionable," Lewenza said Thursday.
"I can't even suggest to you how furious we are as an organization to suggest that our retirees won't be treated with decency and respect during this crisis. What good is a pension guarantee fund if it's not there when you need it?"
The comments follow those of Ontario Premier Dalton McGuinty, who on Wednesday warned that his government's pension guarantee fund is too small to help out retired autoworkers in the event one of the Detroit Three goes under.
"The money available in that (fund) is very, very modest," McGuinty said.
"That comes nowhere near meeting any liabilities for example, for the auto sector alone, let alone all the other sectors."
The Pension Benefits Guarantee Fund has about $100 million available. That fund provides pensioners in every industry with up to $1,000 per month in case a private pension plan fails.
But the pension liabilities of the auto makers run into the billions.
However, on Thursday, Ontario's Finance Minister Dwight Duncan said that the government will do what it can to ensure pensioners are protected. He said he will work with unions, companies and Ottawa to address the issue.
Duncan said he will meet with union officials next week to discuss solutions.
Dennis DesRosiers, an auto industry analyst, blamed the pension shortfall on industry benefit packages that are too rich for their own good.
DesRosiers noted that the decline in the stock market, a loss in market share and an upswing in layoffs have all exacerbated the shortfall.
"Now we have come to discover ... that GM, Ford and Chrysler can't afford all of these extra things," he told CTV Newsnet's Power Play.
According to the CAW, if GM went under and liquidated its assets, the fund would still be short by about $2 billion.
But in years past, Ontario topped up the pension insurance plan when both Algoma Steel and Massey Ferguson went bankrupt.
GM was given a break from contributing to its own pension plan back in the early 1990s by the Ontario NDP government.
As part of the pension holiday, GM was asked to pay extra into the Pension Benefits Guarantee Fund, said CAW economist Jim Stanford.
More than a decade and a half later, the lack of contributions has come back to haunt workers, Stanford said.
As of November 2007, GM's pension plan was about $5 billion short.
"It's not about autoworkers ... it's about a little bit of security for retired workers," he said, stressing that Nortel workers could also be left in the lurch.
Protest planned
Lewenza reiterated on Thursday that autoworkers are not to blame for the current financial crisis that has devastated Canada's manufacturing industry and the global economy.
"This is not a union issue, it's a social right in the province of Ontario for people to have a pension plan," he said. "All retirees should be treated with respect."
He urged both the federal and provincial governments to keep negotiating with automakers for a successful bailout funding plan that will keep the struggling companies afloat.
"The best way to protect pensions is to keep the companies alive," Lewenza said. "Canada has to maintain their manufacturing footprint."
Lewenza said the union will hold a "massive" protest at the Ontario legislature next week in response to McGuinty's comments that Ontario's pension-guarantee fund is not enough to cover pensions.
The protest will be held on April 23 on the grounds of the legislature. Lewenza urged all retirees to come out and show their support.
Ontario is abandoning its responsibility to retirees by claiming it can't guarantee the pensions of autoworkers whose companies have gone bankrupt, the president of the Canadian Auto Workers said Thursday.
Ken Lewenza said that the province's big mistake was allowing the pension safety net to go under funded in the first place.
"To suggest that retirees will bear the brunt of something they have no control over is just unconscionable," Lewenza said Thursday.
"I can't even suggest to you how furious we are as an organization to suggest that our retirees won't be treated with decency and respect during this crisis. What good is a pension guarantee fund if it's not there when you need it?"
The comments follow those of Ontario Premier Dalton McGuinty, who on Wednesday warned that his government's pension guarantee fund is too small to help out retired autoworkers in the event one of the Detroit Three goes under.
"The money available in that (fund) is very, very modest," McGuinty said.
"That comes nowhere near meeting any liabilities for example, for the auto sector alone, let alone all the other sectors."
The Pension Benefits Guarantee Fund has about $100 million available. That fund provides pensioners in every industry with up to $1,000 per month in case a private pension plan fails.
But the pension liabilities of the auto makers run into the billions.
However, on Thursday, Ontario's Finance Minister Dwight Duncan said that the government will do what it can to ensure pensioners are protected. He said he will work with unions, companies and Ottawa to address the issue.
Duncan said he will meet with union officials next week to discuss solutions.
Dennis DesRosiers, an auto industry analyst, blamed the pension shortfall on industry benefit packages that are too rich for their own good.
DesRosiers noted that the decline in the stock market, a loss in market share and an upswing in layoffs have all exacerbated the shortfall.
"Now we have come to discover ... that GM, Ford and Chrysler can't afford all of these extra things," he told CTV Newsnet's Power Play.
According to the CAW, if GM went under and liquidated its assets, the fund would still be short by about $2 billion.
But in years past, Ontario topped up the pension insurance plan when both Algoma Steel and Massey Ferguson went bankrupt.
GM was given a break from contributing to its own pension plan back in the early 1990s by the Ontario NDP government.
As part of the pension holiday, GM was asked to pay extra into the Pension Benefits Guarantee Fund, said CAW economist Jim Stanford.
More than a decade and a half later, the lack of contributions has come back to haunt workers, Stanford said.
As of November 2007, GM's pension plan was about $5 billion short.
"It's not about autoworkers ... it's about a little bit of security for retired workers," he said, stressing that Nortel workers could also be left in the lurch.
Protest planned
Lewenza reiterated on Thursday that autoworkers are not to blame for the current financial crisis that has devastated Canada's manufacturing industry and the global economy.
"This is not a union issue, it's a social right in the province of Ontario for people to have a pension plan," he said. "All retirees should be treated with respect."
He urged both the federal and provincial governments to keep negotiating with automakers for a successful bailout funding plan that will keep the struggling companies afloat.
"The best way to protect pensions is to keep the companies alive," Lewenza said. "Canada has to maintain their manufacturing footprint."
Lewenza said the union will hold a "massive" protest at the Ontario legislature next week in response to McGuinty's comments that Ontario's pension-guarantee fund is not enough to cover pensions.
The protest will be held on April 23 on the grounds of the legislature. Lewenza urged all retirees to come out and show their support.