General Motors is reported to have a pension fund obligation shortfall of some US$71bn, which exceeds the value of the company itself by US$20bn, a new report states.

According to Reuters, GM's vice chairman Steve Girsky says the firm is presently not in any talks with the United Auto Workers union over the situation. The company will instead discuss the matter as part of scheduled talks over a new labour agreement due in 2015.

"There's a lot of education that needs to go on to execute something like that," Steve Girsky told Reuters in an interview. "For the UAW to pull the trigger on that, it would seem to be something that big and visible would probably have to occur around bargaining."

The last round of talks between the UAW and GM were in 2011. At that time, the firm and the union acknowledged the shortfall and agreed to discuss ways of reducing the risk of its pension shortfall. Credit ratings agencies view the pension funding pledges as debt and a concern to GM investors.

One solution to the situation might be for GM to spin off its obligation to blue collar workers to a third party. In 2012, the company hived off a US$28bn obligation to 118,000 white-collar retirees to a unit of Prudential Financial.

Author: Glenn Brooks