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In June 2 0 0 9 , General Motors Company, the world's second - largest automaker, filed for bankruptcy. The company's troubles began decades earlier
In June General Motors Company, the world's secondlargest automaker, filed for bankruptcy. The company's troubles began decades earlier when the company agreed to provide employees with large pension benefits instead of giving them wage increases. While this strategy was initially successful, by the mids large numbers of employees began to retire, and the increasing pension costs began to put a financial strain on the company. In the company issued $ billion in debt to fund its growing unfunded pension liability, but this only provided a temporary fix. From to General Motors spent $ billion on pension and health care benefits for retirees, and the company had retired union employees for every one active union employee. By June the combination of growing pension obligations and deteriorating sales forced the company into bankruptcy. Why do you think the company didn't foresee this future problem? What else could the company have done to prevent increase wages without causing the bankruptcy in the future?
In June General Motors Company, the world's secondlargest automaker, filed for bankruptcy. The company's troubles began decades earlier when the company agreed to provide employees with large pension benefits instead of giving them wage increases. While this strategy was initially successful, by the mids large numbers of employees began to retire, and the increasing pension costs began to put a financial strain on the company. In the company issued $ billion in debt to fund its growing unfunded pension liability, but this only provided a temporary fix. From to General Motors spent $ billion on pension and health care benefits for retirees, and the company had retired union employees for every one active union employee. By June the combination of growing pension obligations and deteriorating sales forced the company into bankruptcy. Why do you think the company didn't foresee this future problem? What else could the company have done to prevent increase wages without causing the bankruptcy in the future?
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