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Members of Congress, Delphi Retirees Question Government Hand in Pension Cuts
Posted by Press Office on December 04, 2009 | comments
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In a troubling example of the questions that accompany continued government bailouts and political meddling in corporate boardrooms, members of Congress and retirees appeared before the House Subcommittee on Health, Employment, Labor and Pensions on Wednesday to speak out against a decision that has lead to unfair and unequal treatment of thousands of retirees of the now-bankrupt auto parts manufacturer Delphi Corporation, which had several facilities in the Dayton area.

Questions Surround “Unusual Arrangement” Favoring Labor Unions

As Delphi emerged from bankruptcy, the company shed its obligations to the Pension Benefit Guaranty Corp., a government program that provides partial pensions to workers from companies that go under.

But in what the Buffalo News calls an “unusual arrangement” General Motors – the now government controlled recipient of $60 billion in taxpayer bailout money – agreed to “top off” pensions for former Delphi employees who were members of the United Auto Workers and other unions.

Meanwhile, salaried and non-union employees were left out.  As a result, the Detroit News reports that many retirees in southwest Ohio – and nearly 15,000 across the country – now face devastating reductions in expected pension benefits of up to 70 percent. The Buffalo News reports that this decision will result in the average Delphi salaried employee losing nearly $300,000 over his or her life.

In Testimony, Retirees Say They Were “Thrown Under the Bus” as Government Picked Winners and Losers

“It was a U.S. government decision to pick and choose which groups it was going to support,” said Bruce Gump, a former Delphi salaried employee from Warren, Ohio.

“It’s either political, or it’s the concern over them striking,” said Jim Frost, one of the retirees group leaders from Clarence, New York.

Members of Congress Decry Disparate Treatment, Call on Obama Administration to Release all Information Pertaining to Decision

“All of these retirees, regardless of labor affiliations or not, worked alongside each other during their careers,” Congressman Michael Turner (R-Centerville) said. “They should not be treated differently in their retirement.”

“The American people, especially those affected by the bankruptcy proceedings, deserve to be a part of an open and transparent process,” said Congressman John Boehner (R-West Chester) in a statement submitted for the record.

“The decisions made by Delphi, GM, and the Auto Task Force demand an explanation,” said Congressman Chris Lee (NY-23). “Delphi Retirees are not looking for more than they have earned. They are simply looking for fair and equal treatment....”

Note: Wednesday’s hearing was granted at the request of Congressman Boehner and other members of Congress. Boehner has fought for fair treatment for Delphi workers and retirees since GM filed for bankruptcy in June, when he joined Rep. Turner in writing Ron Bloom, Senior Advisor on the Auto Industry at the U.S. Department of Treasury, asking the Automotive Task Force to support the assumption of Delphi Corporation’s hourly and salaried pension obligations by GM.

Boehner has also introduced a Resolution of Inquiry – H. Res. 591, requesting information from the Obama Administration regarding the Delphi decision, as well as other documents relating to the government’s role in the restructuring of General Motors and Chrysler.  The resolution has passed committee, but Democratic leaders have refused to schedule it for a floor vote.

House Republicans have offered a plan to end the bailouts and scale back the unprecedented government involvement in the private sector.  The Consumer Protection and Regulatory Enhancement Act will ensure that: the government stops rewarding failure and picking winners and losers; taxpayers are never again asked to pick up the tab for bad bets on Wall Street while some creditors and counterparties of failed firms are made whole; and market discipline is restored so that financial firms will no longer expect the government to rescue them from the consequences of imprudent business decisions.

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