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Saturday, June 13, 2009

GM slashes pensions at the top

Washington -- General Motors Corp. is making dramatic reductions in the pensions of some of its outgoing high-level executives -- a move that is expected to cost ousted CEO Rick Wagoner up to $15 million.

GM President and CEO Fritz Henderson confirmed Friday that pensioners whose yearly payments are $100,000 or less will lose nothing.

But those who get more will receive a third of what they had expected in excess of $100,000. No one is likely to lose as much as Wagoner, who was fired more than two months ago by President Barack Obama.

The pension announcement came as yet another high-profile GM executive, Global Purchasing Group Vice President Bo Andersson, announced he is leaving.

Andersson, 53, will pursue other career opportunities, joining a growing list of departures that includes product czar and Vice Chairman Bob Lutz, who is leaving at the end of the year, and Cadillac chief Mark McNabb, who resigned last month.

Andersson joined GM in 1987 as a manager at Swedish brand Saab AB. He also served as executive director of purchasing of electrical and chemical commodities. He was vice president of purchasing in GM's European operations.

Andersson was appointed to his current post in December 2001 and became a group vice president in 2007.

Wagoner, 56, a 32-year veteran of GM, had a pension with total accrued benefits of $22.1 million as of Dec. 31. The pension is to be paid in five annual payments of $4.52 million, with the first monthly installment due upon his retirement.

Wagoner also is owed a $68,900 annual pension. If he is docked two-thirds of the pension beyond the first $100,000 in his combined pensions, the former GM boss would lose $2.99 million a year for five years -- or almost $15 million.

Earlier this month, Chrysler CEO Robert Nardelli confirmed that former Chrysler Corp. CEO Lee Iacocca was losing a company car and his supplemental executive pension. Just how much wasn't made public, because Chrysler is privately held and not required to disclose it.

Lutz is a former president and chief operating officer of Chrysler; he also worked at Ford Motor Co. and BMW AG. Reached by e-mail, Lutz confirmed that his Chrysler pension had been reduced, but he declined to elaborate. An attorney is representing him in the Chrysler bankruptcy case.

About 1,200 Chrysler retirees who received large pensions under the company's Supplemental Employee Retirement Program got their checks cut off after the April 30 bankruptcy filing.

They're lumped in with more than 100,000 other unsecured creditors to whom Chrysler owes money. The bankruptcy court will determine how much, if anything, they will receive.

LINK:GM slashes pensions at the top | | The Detroit News
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