Bush To Meet With Automakers on Pensions, Health Care

The New York Times reports that the meeting is set for the end of May between the president and General Motors Chairman and CEO Rick Wagoner, Ford Motor Co. Chairman Bill Ford and Tom LaSorda, the chief of the Chrysler Group. Official spokesmen for the companies and the White House did not confirm the meeting to the newspapers’ reporters, according to a CNNMoney.com article.

One of the reasons the Ford and General Motors companies are having a hard time keeping their prices down in respect to Japanese automakers because of their retiree health care costs, which tacks on another $1,500 to the price of a vehicle, the paper reported.

The meeting come at a time when other big industries – along with automakers — like the airline and steel companies are trying to figure out a way to fund employee pensions and legislators on Capitol Hill try to agree on a pension reform bill (see House and Senate Must Now Reconcile Reform Bills ).

The Pension Benefit Guaranty Corporation (PBGC) – the agency that insures ailing private-sector pension funds – says the auto industry pension system is estimated to be underfunded by $45 to $50 billion. ( Auto Pensions Next Big PBGC Bomb?). The agency has already been hit hard over the past few years, having to absorb pension defaults by other   industries (see PBGC Exec: Pension Insurer Hit by ‘Perfect Storm’ ), with several steel companies begging its help (see Parade of Steel Plans to PBGC Continues ) and airlines like United Airlines needing to be bailed out, too (see PBGC Takes Over Three US Airways Pension Plans at $2.3B Cost ).