GM bailout ripped during House panel hearing

June 23, 2011 http://detnews.com/article/20110623/AUTO01/106230373

GM bailout ripped during House panel hearing

Debate on ‘winners and losers’ rages during panel hearing

DAVID SHEPARDSON
/ Detroit News Washington Bureau

Washington — The chairman of a House panel sharply criticized the government’s $50 billion bailout of General Motors Co. on Wednesday.

Contrary to the Obama administration’s assertions, “it is far from clear the bailout has succeeded in its goals of revitalizing the company,” said Rep. Jim Jordan, R-Ohio, chairman of the House Oversight and Government Reform committee’s panel on regulatory affairs, stimulus and government spending.

The panel held a hearing Wednesday on the bailout’s long-term impacts.

The government’s decision to put GM through a quick bankruptcy “desecrated the rule of law” and favored union members over other creditors, Jordan argued.

The hearing was heavy on harsh rhetoric. Rep. Mike Kelly, R-Pa., a GM dealer who fought in arbitration to keep his dealership, said “some people took their own lives” because GM reduced its dealer network. He didn’t offer any evidence to support that.Ron Bloom, the White House’s former auto czar, noted that GM was essentially insolvent when it sought a government bailout.

“They simply made promises to people that were larger than they were able to honor,” Bloom told the committee.

He said the government did not make decisions about specific groups.

The committee members are looking at GM’s former parts unit, Delphi Corp., and its decision to abandon its pension plans in bankruptcy covering about 70,000 people — including about 20,000 salaried retirees.

Many of those are in Ohio.

Rep. Michael Turner, R-Ohio, wants to subpoena members of the administration to answer more questions about the government’s involvement in GM during the bailout.

“It was the decisions that picked winners and losers,” Turner said.

The federal government allowed GM to use nearly $3 billion in taxpayer funds to help Delphi exit bankruptcy and let GM re-acquire part of its former parts unit, which it then resold.

The Delphi pension plans were underfunded by about $7 billion, and the U.S. government’s pension agency has taken responsibility for $6.1 billion.

Delphi salaried retirees complain that the Obama administration approved GM’s decision to set aside $1 billion to “top up” the pensions of most union retirees, including those from the United Auto Workers. That protected them from losing benefits, but the same arrangement wasn’t made for salaried retirees.Some will lose up to 65 percent of benefits, as well as life and health insurance.

“There is no shared pain as far as the salaried workers are concerned,” said Rep. Dan Burton, R-Ind.

“One segment was left to hang out to dry.” Rep. Darrell Issa, R-Calif., said bluntly that Delphi salaried retirees got “screwed.”

Share
Seniority Lists
Recent Posts!
Bargaining Committee

Chairman
Mike Herron
President
Tim Stannard
Zone at Large – 1st
Danny Taylor
Zone at Large – 2nd
Mark Wilkerson
Committeepersons
Joe McClure
Chad Poynor
Steve Roberts
Derek Lewis
Bill Cundiff
Kirk Zebbs
Don Numinen
Jay Minella
Danny Bragg
Chris Hill
Rashad Thomas
Keith Oswald
Chris Brown

1853 Officers

President
Tim Stannard
Chairman
Mike Herron
Vice President
Darrell DeJean
Financial Secretary
Mark Wunderlin
Recording Secretary
Peggy Mullins
Trustee (3)
Jay Lowe
Dave Clements
Dave Spare
Sgt. at Arms
David C Spare
Guide
Ashley Holloway
E-Board at Large (2)
David Ryder
Steve Roberts
GM Unit Chair
Mike Herron
Voith Unit Chair
Larry Poole
Ryder Unit Chair
Patrick Linck
AFV Unit Chair
Neil Osborne
Retiree Chair
Mike Martinez

Get Text Alerts



asdasdsd

*Standard text messaging rates may apply from your carrier