ANDERSON — In an economic crunch with little cash to get them through hard times, the country’s three major automakers — General Motors, Ford and Chrysler — have asked for a $25 billion government loan.
Whether the federal government will come through for the corporate giants remains to be seen, thus putting jobs and pensions of millions of workers and retirees in limbo. With Anderson’s large population of GM retirees, the entire city could be affected by the loan decision.
Alexandria GM retiree Don Swegman said GM’s 750,000 retirees losing part or all of their pensions could affect the United States economy and drive up home foreclosures.
“There’s a lot of people that retired and stayed here,” Swegman said. “If they were forced to lose part of their pension, it’s going to definitely affect everything in the area. People need to look at the big picture on this because it’s going to directly or indirectly affect as much as 3 million people and their livelihoods. That’s a lot of people out there who spend money in their communities, buy cars and appliances and eat out. It’s going to really affect the economy in every area of the United States.”
If the auto industry doesn’t receive the loan and auto companies are forced to declare bankruptcy, retirees’ pensions would revert to the federal government under a guarantee program, and retirees would receive only about 50 percent of those pensions, Swegman said.
For that reason, the decision on the loan could affect everyone in communities supported by GM retirees, like Anderson.
“The ripple effect would be devastating,” said James Burgess, an Anderson resident who works for the GM plant in Fort Wayne. “That is really, really vital that the people in this community have to show an interest in what is going on. They need to call their legislators, their congressmen, because it may be 60-70 percent of the income that comes in the community might be from the retirees.”
Swegman said the loan would likely be repaid with interest by GM and other automakers once their cash flow situation worked out and could allow taxpayers to make money on the deal.
“GM isn’t asking for a handout,” he said, adding that most hourly GM retirees were backing the bailout option. “They’re asking for a bridge loan. That loan will be repaid and that loan will be repaid with interest.”
Carl Davis, who was a member of former United Auto Workers Local 662 and wrote a book about the union’s history, said many GM retirees were not old enough yet to receive Medicare or Social Security benefits and would have to look for other jobs if they lost some or all of their pensions.
“The auto industry has been the catalyst for the economy in this country for 60-70 years,” he said. “If you lose all that income, what do you think would happen to all these businesses around here? A lot of people are not Social Security eligible yet and also don’t have any Social Security benefits of any kind. They would have to go out and start looking for jobs.
“There’s no jobs around here much anyway.”
Swegman said he would hate to see the company he worked with for more than 31 years have to declare bankruptcy.
“Part of it’s mismanagement, part of it’s the economy, part of it is just GM has not had the right mix of vehicles,” he said. “Hopefully it’s not too late for us.”
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November 19, 2008
9:13 p.m.: Retirees worry about GM's future
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