Signs point to GM bankruptcy

General Motors has a plan to return to profitability:

Get rid of as many United Auto Workers as it can by offering $35,000 to $140,000 to leave.

Not sure how many are going to pack up and go, but on Wednesday the world's largest–and least-profitable–automaker made such buyout offers to each of its 113,000 UAW members in the U.S.

By 2008, GM hopes to have 30,000 fewer of them.

General Motors Corp.'s decision to offer early-retirement buyouts to 113,000 workers left many in the nation's capital wondering Wednesday whether their worst fears might come to pass–a bankruptcy by the troubled automobile giant.

That would mean that GM's pension obligations, estimated by the government to be underfunded by $31 billion, likely would be dumped on the Pension Benefit Guaranty Corp., the agency that backs up private pension plans in the U.S.

Congress is considering a bill to shore up the agency's resources and force stronger steps to strengthen underfunded pension plans. There is concern that a GM bankruptcy could overwhelm the pension agency, which is supported by company premiums, and possibly require a taxpayer bailout.

"We are watching this very closely," said a Senate Finance Committee staff member involved in writing the legislation, which has stalled. "It is one of our big concerns." More at Chicago Tribune

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