Business Services Industry
Pension Agreements Burden U.S. Auto Makers.
Knight Ridder/Tribune Business News, January, 2003
By Meera Selva, Sunday Business, London Knight Ridder/Tribune Business News
Jan. 12--The pension crisis is seriously damaging the American car industry's profitability and exacerbating overcapacity, financial services group KPMG has warned.
A report on the global car industry shows that $600 of each car sold by the Big Three US manufacturers -- General Motors, Ford and DaimlerChrysler -- goes towards pension schemes, at a time when demand for American cars is falling and profit margins are vanishing.
The companies are trapped in draconian contracts signed with the powerful Detroit-based United Auto Workers union, which oblige them to provide generous pension and healthcare benefits for employees and spouses. Union agreements also...
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