By Joe Olenick<br><a href="mailto:joe.olenick@lockportjournal.com">E-mail Joe</a>
Delphi Corp. will be in court today asking for approval of a modified plan that could end a four-year adventure in Chapter 11 bankruptcy. Part of that deal includes General Motors taking back five Delphi plants, one of which is the Lockport thermal systems plant on Upper Mountain Road.
Late Monday night, a group of Delphi’s creditors led by J.P. Morgan Chase Bank won out in an auction for the company’s assets. The creditors’ bid would involve them forgiving the $3.45 billion Delphi owes them. The deal is similar to the one Delphi announced in June with Platinum Equity of California, who lost the auction to the creditors. The group didn’t like the Platinum deal, so it submitted its own bid.
But as Delphi stands before U.S. Bankruptcy Judge Robert Drain today, it’ll have to contend with objections to the plan, most of which are by workers and retirees who may be facing cuts to their pensions. According to the Associated Press, Delphi has resolved objections filed by several state and federal agencies.
U.S. Rep. Chris Lee, R-Clarence, has been active in a bipartisan movement in Congress on behalf of Delphi retirees. Lee said he has been keeping up on all Delphi activity and has stayed in contact with both salaried and hourly retirees.
“We want to keep them informed and continue to see that this has visibility,” Lee said. “Through no fault of their own, these retirees could see a 20 to 70 percent cut to their pensions.”
Lee met with the Pension Benefit Guaranty Corp. last week. The PBGC is the federal agency that would take over the pensions of about 70,000 Delphi workers and retirees, both salaried and hourly. Lee also met with Ron Bloom, of the U.S. Treasury Department’s Auto Task Force. Lee, along with a host of congressional representatives, has been asking for more transparency and an investigation into the decision-making process of Delphi pensions being turned over to the PBGC. Lee said he has received a letter from the chairman of the U.S. House of Representatives Financial Services Committee agreeing with Lee on the need for an investigation. Chairman Rep. Barney Frank, D-Mass., said soon the committee will have an idea on how to proceed with a hearing.
“We want the retirees to be treated fairly,” Lee said.
In a released statement, Platinum said it would continue discussions with Delphi in advance of today’s court hearing.
“We look forward to working on the next phase of this process with Delphi, its lenders and General Motors, all of whom have acknowledged the value of Platinum Equity’s operating expertise,” Platinum said.
Delphi spun off from GM in 1999 and has been operating in bankruptcy since October 2005. It almost emerged from bankruptcy last year, until investors pulled out of the deal in April 2008. Delphi produce about 10 percent of the parts GM uses.
Contact reporter Joe Olenick at 439-9222, ext. 6241.
The Associated Press contributed to this report.
