Gettelfinger wary about using pension funds
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Gettelfinger wary about using pension funds to help Delphi
Gettelfinger also addresses GM buyouts, Plastech bankruptcy
David Barkholz
Automotive News | February 14, 2008 - 12:16 pm EST
DETROIT — UAW President Ron Gettelfinger said today that he would be "very cautious" about allowing worker pension fund money to be used by Delphi Corp. to leave Chapter 11 bankruptcy protection. "We’re not going to let Delphi rape a pension fund," Gettelfinger said in suburban Detroit before a luncheon honoring him as Newsmaker of the Year by Crain’s Detroit Business. Delphi may need help from the Delphi pension fund or that of former parent General Motors to raise about $3.7 billion to operate outside of bankruptcy. Tight credit markets have Delphi way behind schedule in its effort to raise the exit financing from traditional sources such as banks. Delphi had planned to complete the financing Feb. 5 and leave Chapter 11 protection this quarter. Delphi is in talks with GM about whether the automaker can again come to the supplier’s rescue. GM has spent more than $7 billion on worker buyouts and other restructuring efforts since Delphi filed for Chapter 11 in October 2005. Gettelfinger said he would have to know all the details of pension fund help before he would consider the idea. So far, he said he has had no discussions with GM or Delphi on the matter. But he said Delphi Chairman Steve Miller has pressured GM throughout the bankruptcy process. Gettelfinger said he would be concerned about having worker pension fund money brought into the equation. "GM’s pension fund is well-funded, and we intend to keep it that way," he said. If Delphi can’t raise the exit funds, it will have to remain in Chapter 11 protection. That would be costly. Professional and legal fees total about $10 million a month. Gettelfinger said he wants to see Delphi emerge for the sake of the workers and GM. Delphi is GM’s largest supplier. Once Delphi completes its reorganization, GM still will account for about 25 percent of the supplier’s business. Earlier this week, Delphi spokesman Lindsey Williams said the company still expects to exit bankruptcy protection by the end of March. Delphi, of suburban Detroit, ranks No. 2 on the Automotive News list of the top 100 global suppliers, with parts sales to the automakers of $24.40 billion in 2006.
GM buyouts
Separately, Gettelfinger said GM’s buyouts and early retirements being offered to 74,000 UAW members will yield enough takers to allow GM to hire new workers at second-tier wages — about half the $28 an hour now paid veteran hourly workers. He said he expected 15,000 to 20,000 workers to take a buyout. "It would result in the activation of the second tier piece of it…at some particular locations," Gettelfinger said. "At others it will not." The economy, he said, is making it harder for families to decide whether they can find another job or sell their homes to retire to another area. Ford Motor Co. and Chrysler LLC also are offering buyouts.
The Plastech bankruptcy
Gettelfinger also said the UAW is concerned about the bankruptcy at recently unionized supplier Plastech Engineered Products Inc. Plastech is in court today trying to prevent Chrysler from removing its tooling from Plastech plants. Gettelfinger said Plastech, which is about 70 percent unionized, will be on the agenda when he and UAW Vice President General Holiefield meet with Chrysler co-Presidents Tom LaSorda and Jim Press at the company’s headquarters Friday, Feb. 15. Gettelfinger said he was pleased that the UAW has been named to a creditors’ committee to help influence the restructuring at Plastech. He said the union has a positive relationship with Plastech founder and owner Julie Brown. On other matters, Gettelfinger said:
The UAW expects next week to file for court approval to create the retiree health care trusts negotiated last fall with GM, Ford and Chrysler. Those trusts, known as Voluntary Employee Beneficiary Associations, would put the UAW in charge of about $60 billion paid by the automakers to provide health care to hourly retirees over the next several decades. The union hasn’t endorsed Hillary Clinton or Barack Obama for the chance to represent the Democrats in the 2008 presidential election. However, Gettelfinger made clear that he expects a Democrat to be the next president. He’s happy that U.S. Bankruptcy Judge Robert Drain cut Delphi executive bonuses planned when the supplier leaves bankruptcy. But he said those bonuses are still excessive. "They’ve just lowered the level of slop at the trough," Gettlefinger said. The UAW-supported bankruptcy reorganization plan at drivetrain parts supplier Dana Corp. has yielded 2,000 new union members at 11 recently organized plants. Dana emerged from nearly two years of Chapter 11 bankruptcy at the end of January. The UAW helped the company negotiate its reorganization plan with the backing of financier Centerbridge Capital Partners.
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Ron Gettelfinger
