Automotive News reports that if GM is forced to declare bankruptcy, the federal government could be forced to take on the burden of paying for the pensions
“„A General Motors bankruptcy could become a nightmare for the federal government’s Pension Benefit Guaranty Corp.
“„That’s because the automaker could dump as much as $13.5 billion in unfunded pension liabilities onto the U.S. agency that takes over troubled pension plans — the largest ever from a single company — if GM were unable to fund its U.S. defined benefit plans and terminated them.
“„The claim would be almost twice as large as the current record of $7.5 billion from the 2005 termination of the Chicago-based UAL Corp.’s United Airlines pension plans.
“„For this to happen, GM would have to terminate its plans and PBGC officials would have to agree to cover all the unfunded pension liabilities of the company’s U.S. hourly and salaried plans. Together, the plans had a combined $84.5 billion in assets and $98.1 billion in liabilities as of Dec. 31, according to its 10-K report.