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Stocks F / Ford Motor Company
|Subject: Ouch! Pension Pain For Ford||Date: 1/29/2013 4:32 PM|
|Author: TMFBreakerRob||Number: 17371 of 18097|
From The Detroit News: http://www.detroitnews.com/article/20130129/AUTO0102/3012904...
Read this carefully:
Ford Motor Co.'s pension deficit widened in 2012 by 21 percent and the Dearborn automaker vowed Tuesday to boost contributions to its under-funded pensions by $5 billion in 2013.
Despite the fact that Ford pumped $3.4 billion into its worldwide pension plans in 2012 — over the $1.1 billion it infused in 2011 — the automaker's pension plans underfunding widened.
Ford said its pensions are now underfunded by $18.7 billion, up from $15.4 billion. Its U.S. plans are underfunded by $9.7 billion, up from $9.4 billion.
Another way to look at it: The pension plan is a MAJOR drain on Ford cash. This will be a negative for the company until it's fixed. A couple things on "the fix":
* "Newer" employees aren't in the pension plan. That's been the case for a few years now (someone here can provide details). The deficit is due to older salaried employees and retirees.
* Ford is offering buy-outs for both older salaried employees and retirees. I don't know how many are taking it. All I know is that I'm still waiting for my offer.... and based on my "guesses" of the scale of the buy-out, I'd be interested in taking it. I'll provide more info when I finally get the actual offer.
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