Ailing Chrysler's pensions underfunded
Denver Post Wire
Wednesday, May 20, 2009
Bankrupt Chrysler's pension plans may be underfunded by more
than $10 billion, the federal Pension Benefit Guaranty Corp. has
If the pensions are terminated, the agency's claim for the
shortfall in the automaker's bankruptcy case "would exceed $9
billion," Chrysler lawyers said in a filing Tuesday in U.S.
Bankruptcy Court in New York.
Chrysler wants to make a deal with the company, the PBGC,
Cerberus Capital Management and Daimler to partly fund the plans
and avoid such a termination. Chrysler's proposed sale
would erase Daimler's $1 billion guaranty securing the pensions,
according to the filing.
Under the proposal, Daimler will make $600 million in planned
cash contributions to the pensions while reducing its $1 billion
pension guaranty to $200 million.