Page 843 - Pensions News Today

Detroits woes. now as it files for bankruptcy, detroits workers are bracing for what could happen to their pensions and health care. >> will this affect pensions? >> based on what we know, anythings possible. >> we paid a percentage of our wages every year into that, so its not something thats being given to us. its our money. >> reporter: more than $18 billion in debt, michigans governor called bankruptcy the only choice. >> detroit is broke from a financial point of view and more importantly t...

I can hear you fine. >> all right. what would it mean for your finances if your pension was reduced? >> well, it would -- i dont know if id be able to stay in the condo, i have a small condo where im at. i dont know if id be able to stay in my condo. i dont really need all the pension for myself. im single, but id like to send some of my -- help my grandkids with college. you know, we just dont know right now. not only myself, theres a lot of widows. >> i think were losing that connection, larry...

Detroit declares bankruptcy. what the move means for city workers and retirees in the motor city. plus theyve been silent since the verdict. now the parents of trayvon martin, they are speaking out. and the heatwave gripping much of the country getting worse. the question now is relief in sight? this is "cnn newsroom." im wolf blitzer reporting from washington. its an iconic american city. the motor city. the capital of the u.s. auto industry. the city that gave us the motown sound. today, d...

Development. this has been going on far too long and isnt it time to say enough is enough? >> reporter: a dwindling population, a decline of the automakers, and political corruption are just some of detroits woes. now as it files for bankruptcy, detroits workers are bracing for what could happen to their pensions and health care. >> will this effect pensions? based on what we know, anything is possible. >> we paid a percentage of our wages every year into that, so its not something thats being g...

To be voices that say enough is enough. theyre going to agree with you on that. the public employee unions likely are going to put up a fight. what is your message to them? >> well, two or three things. first of all, with respect to e retir retirees, its been hard to figure out how to work with them to have them have a voice at the table. the unions dont represent all the retirees. proactively ask for in the bankruptcy filing is for the judge to appoint a representative for retirees. because i t...

People, the pensioners, people currently working for the city, and retired. theyre telling me they are scared. theyre scared their health care benefits are going to be cut. theyre scared their pensions are going to be cut. is there any way to exit bankruptcy without concessions from them? >> we do have roughly 9700 employees and 19,700 retires, who deserve state of the art current 21st century services. nothing is going to change for the rest of this we will go through this process. we have no p...

Its been clear for years just like when youre driving your car and the yellow light is flashing at you deal with me, its going to be a problem, now the cars parked on the side of the road for detroit because theyre out of gas. jenna: so what do you see in the next few months? we have to wait to see if the judge accepts the filing of bankruptcy, and then from there theres going to have to be this plan in place. how do you save detroit? >> well, theres going to have to be a substantial -- i think ...

They are looking at their books more closely. it also means it may be tougher and more expensive for your city to borrow money. those muni bonds. they may either spend down their slowing or raise your taxes as a result. >> will we see now when you look at the number of towns and cities across america who could be in a similar predicament. now, detroit is way over -- i mean, 18 billion to 20 billion in debt. should those people living in those other communities be worried about their town or thei...

Benefits and the auto industry, yes, it was faced by a japanese competitors who were making smaller, more fuel-efficient cars and detroit was not responding to consumer demand in the u.s. that was the first blow against it but what really sunk the big three auto companies was that they labor was overpriced. we couldnt compete in a global economy with labor costs which were largely driven by these pensions. it was very interesting, in 2009, gm had 54,000 hourly employees on its payroll but it was...

What steve ratner has been putting on the table, how does the government and private sector work out a formulation that allows the centerpiece of this economy, the auto industry, stay a part of that but expand it so families and communities can begin to evolve around this new economy and detroit back on its feet. thats going to be a challenge and were talking hundreds of billions of dollars, not just $20 billion or $30 billion there in the shortfall right now. >> joe, some of the problems that y...