Pension crisis alarms even Wall Street

Workers World was in court here on Aug. 11 arguing for a dismissal of the charges against the newspaper in a lawsuit being pursued by Renco, a company owned by billionaire Ira Rennert.

At issue in the defamation case are articles that appeared in WW last February having to do with the fate of workers at WCI Steel, which was then owned by Renco. (WW, Feb. 14, “WCI Steel bankruptcy robs workers’ pensions”) At the time of the WW articles, the WCI Steel pension fund reportedly had a $117 million shortfall and the quasi-governmental Pension Benefit Guar anty Corp. had filed a lawsuit in order to force Renco to assume responsibility for the shortfall.

Attorneys from the media law firm Davis Wright Tremaine, who are representing the newspaper pro bono, argued before Justice Edward Lehner of New York State Supreme Court that Renco’s complaint should be dismissed because the WW articles in question represented an expression of opinion that is protected under the First Amendment to the U.S. Constitution and New York state law.

A brief submitted earlier by the attorneys had summed up Renco’s complaint this way: “When the smoke and mirrors of Renco’s opposition are cleared away, what remains is a plaintiff unhappy with the critical opinion expressed in a political paper which has consistently taken the side of the workers against the side of big business.”

The substance of the WW articles was that many large corporations have turned to bankruptcy courts to find a way out of the obligations to workers agreed to under union contracts.

The pension crisis in this country has grown even bigger since WW’s articles on WCI Steel. Recently, both retirees and active General Motors and Delphi workers demonstrated in front of Delphi’s headquarters in Troy, Mich. Their signs read “Fund pensions, not fraud” and “No more givebacks.”

Delphi, an auto parts supplier, is in bankruptcy court in Michigan, where it is seeking to set aside its union contracts.

Delphi was spun off by GM and now employs mostly temporary workers at much lower wages. They get no health insurance or other benefits, explained Delphi retiree Jesse Garcia of Flint, Mich. Garcia said he joined the protest, which was organized by Soldiers of Solidarity, because, “I’m concerned about my kids. I’ve got two of them living with me now, and they can’t afford cars or apartments on what they make.” (Oakland Press, Aug. 12)

While millions of older workers are worrying over whether they’ll ever have enough financial security to stop dragging their weary bodies to a job, big corporations are raising the bloated pensions of their top executives.

An article in the June 23 Wall Street Jour nal provided hard-to-get figures on the huge pensions being promised executives who are already rich. The headline says it all: “Hidden Burden: As Workers’ Pensions Wither, Those for Executives Flourish—Companies Run Up Big IOUs, Mostly Ob scured, to Grant Bosses a Lucrative Benefit.”

The Journal article points out that while many big companies complain that pensions are a drain on their bottom line, they don’t readily give out figures on whose pensions they’re talking about.

GM, in its latest annual report, wrote: “Our extensive pension and [post-employment] obligations to retirees are a competitive disadvantage for us.”

Early this year, GM announced it was ending pensions for 42,000 workers. “But there’s a twist to the auto maker’s pension situation,” said the Journal article. “The pension plans for its rank-and-file U.S. workers are overstuffed with cash, containing about $9 billion more than is needed to meet their obligations for years to come.

“Another of GM’s pension programs, however, saddles the company with a liability of $1.4 billion. These pensions are for its executives.”

The article gives examples of many other companies where pensions for top executives—who can retire with as much as $5 million a year for the rest of their lives—add up to hundreds of millions of dollars in liabilities. Clearly, even Wall Street is worried that this will backfire, enraging both workers and shareholders.

Wheeling-Pittsburgh is a steel company that forced workers to take a pay cut when it went into bankruptcy in 2003, around the same time as WCI Steel. It just announced a pay increase and a supplemental pension plan—but only for top executives. (Associated Press, Aug. 15)

Terms like “class war” are starting to appear in small-city papers in the depres sed industrial heartland of this country. It’s a war that confronts workers of all ages, genders and national origins, as young and old are being forced to pay for the limitless greed of this capitalist profit system.

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