The Ontario Premier is probably going to get hammered, especially by the union dominated media, for the proposal to cap the compensation the Pension Benefits Guarantee Fund will pay when a pension plan in the province defaults. The premier and his finance minister are no doubt spooked by the potential cost if General Motors and Chrysler go into bankruptcy protection (as seems more probable with each passing day) and are unable to pay the billions promised in pension and retirement benefits. The Canadian Auto Workers (CAW) will protest and rant but without an iota or moral suasion. Unlike almost all other pension plan beneficiaries, auto workers have never paid a cent into their plans.
I admit to being dumbfounded when I learned of this anomaly as the domestic auto industry spun towards oblivion and it was reported that the manufacturers are 100% responsible for the pensions and the benefits such as post retirement supplementary medical and drug insurance.
I wonder what the affect would be on the hourly cost of production if auto workers, like the employees of other corporations and institutions, contributed 6% or 7% of their gross wages to the pension account. How far would that go to reducing the $10 an hour gap (after recent constraints) that still separates the unionized auto workers from their non-unionized competitors at Honda and Toyota?
It seems not to matter now, since the CAW apparently has resolved not to discuss any additional cost-saving measures with Chrysler, while waiting for the bankruptcy courts to shred the existing contracts. CAW president Ken Lewenza may be too busy preparing his golden parachute for when the union downsizes to reflect the new reality of no Canadian Chrysler and possibly no GM Canada.
Having paid nothing into their pensions,, autoworkers have no right to complain if there is nothing left to pay their pensions. The Ontario government should go further and stipulate that the Pension Benefit Guarantee Fund will be used only to compensate cost-shared pension beneficiaries. Taxpayer assistance should be for those workers who saved for retirement and not the profligate.
