Delphi retirees lose out
|January 29, 2010||http://detnews.com/article/20100129/OPINION03/1290349|
Delphi retirees lose out
Next week, the federal government’s pension agency is set to begin paying sharply reduced benefits to thousands of salaried retirees from the former Delphi Corp.
The check stubs likely won’t have the word "travesty" or "discrimination" printed on them, but they should.
Because roughly half of the 8,400 people who spent years working alongside colleagues from what is now General Motors Co. are the unlucky few forced to pay the price for extricating GM and Delphi, the automaker’s former parts unit, from bankruptcy hell. As many as 14,000 more would-be Delphi retirees face similar fates, thanks to backroom dealing by Treasury Department officials who played favorites in rushing GM through bankruptcy.
Delphi’s hourly workers and retirees, represented chiefly by the United Auto Workers and International Union of Electrical Workers, were spared a similar fate. GM (at the prodding of Treasury, whose auto task force called the shots) moved to a) protect union workers whose leaders b) ardently support an Obama administration that c) needs every union vote it can get in the swing states of Michigan (UAW) and Ohio (IUE and UAW).
Delphi’s salaried retirees? Not so much.
As injustices go — and there are many in the unraveling of Detroit’s auto industry — the smackdown of Delphi’s retirees is about as bad as it gets. Starting Monday, some stand to lose as much as 70 percent of their expected pension payouts while longtime colleagues at GM and hourly workers from their own company are on track to emerge mostly unscathed.
"This is blatantly unfair and discriminatory," Den Black, interim chairman of the Delphi Salaried Retirees Association, told me this week. "Your government — my government — is not allowed to discriminate that way using your and my money."
But that’s what it did, offering yet one more example of Team Obama’s blatant bias toward unionized labor at the expense of salaried folks who don’t necessarily represent an attractive voting block or a ready source of campaign contributions.
Even worse: The feds refuse to answer questions explaining their decision process, ignoring repeated requests for documents. And the nominee to head the Pension Benefit Guaranty Corp., Joshua Gotbaum, is expected to recuse himself from Delphi pension matters for one year because he received a bonus from one of the company’s new owners, Elliott Management Corp.
This appalling series of events wouldn’t be so outrageous had GM, Delphi and the Treasury task force chosen a different path out of bankruptcy, namely off-loading both the hourly and the salaried pension plans of both companies on the PBGC.
Instead, the feds needed to get Delphi out of bankruptcy in order to get GM out, quickly. Government-financed GM agreed to "top-up" Delphi’s hourly plans to assure expected retirement benefits even as it cast the Delphi salaried folks to the rules of the government-owned agency. PBGC guarantees basic benefits to 44 million Americans covered by 29,000 private-sector plans.
In a hearing last December, Rep. Tim Ryan, D-Ohio, called the treatment "unacceptable." A House Republican, Chris Lee of New York, demanded "fair and equitable treatment." Even UAW President Ron Gettelfinger, in a letter this week, denounced the treatment his union would not have tolerated:
"Delphi’s salaried retirees …are being forced to bear extra burdens that are not warranted," he wrote, not missing the opportunity to imply the benefits of unions in times like these. "The life they logically expected upon retirement no longer exists. This is a grave injustice."
Yes, it is.
The salaried retirees sued in federal court and asked the judge to issue a preliminary injunction. He deferred, saying the pension agency needed to either establish an escrow account to compensate retirees or be prepared to repay them lost benefits if he finds in their favor.
PBGC’s response, issued Thursday: Can’t do either under federal law. And if the judge favors the retirees, the pensions go back to "Old Delphi," now in liquidation and unable to fund pensions. The retirees lose either way — which is wrong, whatever the law and the back-channel deals that speak for themselves.