EUROPE - Officials at GM Europe say their European pension schemes should be unaffected by the proposed takeover by a Canadian firm, although public figures are not available to deduce the extent of the car manufacturer’s European pensions liabilities.
GM Europe is currently in talks with Magna International, a Canadian car parts manufacturer, concerning the eventual purchase of GM Europe, formerly a division of General Motors Inc in the US which yesterday filed a Chapter 11 notice for bankruptcy protection.
General Motors Europe has operations in Belgium, Germany, Portugal, Switzerland, Spain and the UK, as well as a 50% stake in Saab which may be given up if the Magna deal is completed.
However, it is unclear what the financial status of GM Europe’s pension funds is and whether they are likely to receive any additional funding should the deal be completed, as a spokesman for the firm said there is no public information on how many pensions schemes the company has and what their values and liabilities might be.
As a consequence, it is not possible to ascertain whether the schemes may require additional funding. Earlier reports in the German media had suggested Magna may be looking to receive additional funding from the German government towards Opel’s German book reserves, beyond the €1.5bn bridging loan approved by the government - €300m of which was paid today.
Opel did give 20,000 former German blue collar workers a top-up pension contribution at the beginning of last year, thought to be worth an estimated €40m. (See earlier IPE story: Opel tops up pensions for blue-collars)
Should this deal with Magna fall through, however, executives who are members of the still open £1.3bn (€1.5bn) Vauxhall Motors Ltd UK pension schemes might see cuts in their pension benefits even if the scheme is taken over by the UK’s Pension Protection Fund (PPF).
The GM group is thought to have 10 UK-based DB schemes worth over £2.1bn - one of which is still open to new members - so if a rescue by another company falls through and schemes are to be administered by the PPF active or deferred members could see a cap on payments of just over £28,000 a year.
Information available on the GM UK pensions website confirms its pension assets are managed within a Common Investment Pool of nine pooled investment vehicles, managed by GM Investment Trustees Ltd, and are invested in UK and international equities, government bonds, corporate bonds and property.
Back in 2003, the US parent group General Motors Inc said its global pensions liabilities were underfunded by “approximately $19.3bn (€18.4bn) at the end of 2002”.
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