Cutting the Rug from under Workers
The hypocrisy of modern business is unbounded. One of the latest fads is slashing pensions for workers while pumping up exorbitant executive pensions. Here is a case where DuPont is behaving accordingly, but has the gall to tell the workers it’s doing them a favor. Admittedly, this explanation for the move is not as abominable as the advice on Northwest Airlines, which I cited in an earlier post — Disposable Workers Consuming Disposables.
Norris, Floyd. 2006. “If Boomers Have It All, What’s Left?” New York Times (1 September).
“DuPont, the chemical company, decided that the week before Labor Day was the perfect time to announce that future workers — those who start in 2007 or after — would not get pensions, and that current ones would accrue benefits at just a third of the old rate. Those new workers, when they retire, will also get no help from the company in paying for health insurance, something current employees have come to expect. The company said it would offer a better defined-contribution plan.”
“What was jarring about the DuPont announcement was not that it happened, or that the company said the changes would improve profits. It was the claim that employees should be happy about it.”
“The planned changes reinforce our commitment to help employees provide for a secure retirement,” said James C. Borel, a DuPont senior vice president. “They also modernize the design of our savings and retirement plans for a new generation of employees, many of whom want more direct control and portability in their benefits.”
“Consider the case of Gary M. Pfeiffer. He stepped down from his post as DuPont’s chief financial officer earlier this year, at the age of 56, and will retire in December, having earned an annual pension of more than $500,000. You might think that was enough for a man who saw DuPont’s stock lose about a third of its value in the nine years he served as C.F.O. But DuPont’s board did not. Just a few weeks before directors voted to reduce retirement benefits for employees, they decided to give $2 million to Mr. Pfeiffer “in addition to the payments and benefits to which he is otherwise entitled as a retiree”.”