Feds brush off issue of Delphi retirees’ plight
December 16, 2011
Feds brush off issue of Delphi retirees’ plight
By DANIEL HOWES
Recovered from his hissy fit last week on WJR’s Frank Beckmann show, former Obama auto czar Steven Rattner essentially lowered the boom Thursday on the Treasury Department’s spending habits:
The feds pumped too much cash into General Motors Co., chiefly because the government paymasters wouldn’t get a second shot to recapitalize the bankrupt automakers. And the feds wrested too little cash in the form base wage cuts from rank-and-file members of the United Auto Workers — a sentiment unlikely to play well with the union members assuming Team Obama is their friend.
Nearly three years and a $6.2 million fine to the Securities and Exchange Commission on unrelated charges later, ol’ Rattner still possesses the capacity to swoop into the city he’d never seen until his auto task force days, lob a few rhetorical grenades into the figurative crowd and stand back while others assess the carnage.
He did as much Thursday in an appearance before the Detroit Economic Club — reappraising how much “sacrifice” was truly “shared” and dismissing as not his problem the pain visited on 20,000 salaried retirees of the former Delphi Corp., who shared a disproportionately large heap of sacrifice.
For the leader of President Barack Obama’s auto task force to concede he and his colleagues inside Treasury a.) pumped too much cash into GM’s balance sheet without b.) providing any mechanism to “claw back” the excess taxpayer cash is the kind of publicity GM and the re-elect team inside the White House probably could do without.
The president and his surrogates are more than happy to claim total credit for the financial and automotive revival of GM. But they’d prefer their victory laps not be at the expense of reminding fierce critics on the right, talk radio and the blogosphere that their investment turned out to be more spendthrift than was necessary.
Second, expressing regret that the auto task force didn’t use the bailout crisis to demand union wage cuts is certain to rearm bailout critics in advance of a presidential campaign likely to focus on how frequently Obama decision-making favors organized labor over business.
Judging by Rattner’s riff, the reality of what was cut in the historic auto bailouts, how strongly the automakers held the line on wages in this year’s contract talks, and the nakedly pro-union posture of the National Labor Relations Board (see Boeing Co. vs. Machinists over South Carolina), among other things, the critics have all the evidence they need.
And then some.
Salaried retirees of Delphi Corp., whose 2005 bankruptcy signaled the start of Detroit’s financial reckoning, charge that Rattner’s auto task force and its bosses inside Treasury and the White House decided intentionally to dump their pension plan on the quasi-governmental Pension Benefit Guaranty Corp.
The move, made as part of the auto task force’s grand strategy to speed GM’s exit from its federally induced bankruptcy, cut many pension payouts to Delphi retirees by as much as 65 percent — far more than any of the “haircuts” ordered in the name of American taxpayers.
The pensions of GM salaried retirees and union retirees at both companies? They emerged relatively unscathed. Delphi’s roughly 20,000 retirees, most of whom can claim many years of service at GM? Hosed by decision-makers who continue to evade accountability for their decisions, despite lawsuits and congressional hearings.
“We couldn’t help all the suppliers, and Delphi was a supplier,” Rattner said, conveniently ignoring the connection of Delphi’s deep troubles to its former parent company, GM, and its often bullying tactics behind the scenes. “It wasn’t our job to help Delphi’s retirees.”
At least not the ones who had never carried union cards. And apparently that suited the president’s men just fine, including his top economic adviser, Larry Summers, with his penchant for martial imagery: “We were alreadyin Vietnam,” Rattner remembers Summers saying. “He could imagine firing a few missiles into Cambodia. But we weren’t going into Laos.”
The problem is that Delphi’s salaried retirees, to extend the unfortunate metaphor, arguably were as much a part of “Vietnam” as their counterparts at GM and inside the unions. The difference is they were expendable, mostly defenseless cogs whose pension claims threatened to gum up a machine making new rules as it went.
However interesting it is to learn the czar thinks GM got too much dough and the UAW didn’t give up enough in the name of shared sacrifice, that’s ancient history. Some 20,000 salaried retirees want to know why they were forced to sacrifice more than just about anyone else in the federal rescue of Detroit.
They’re still waiting.