By Joe Olenick<br><a href="mailto:joe.olenick@lockportjournal.com">E-mail Joe</a>
Support has come for both General Motors’ plan to buy back Delphi plants and for Delphi’s salaried retirees.
The Delphi salaried retirees are facing possible cuts of up to 70 percent of their pensions and have gained some political backing. U.S. Rep. Chris Lee, R-Clarence, is leading an effort calling for congressional committee hearings on the issue. After discussions between the U.S. Treasury Department’s Auto Task Force, GM and Delphi, it was decided the pension obligations of the hourly retirees would be picked up by GM. The salaried retirees’ pensions would go to the federal Pension Benefit Guaranty Corp., an agency that covers some pensions that have been lost.
That transfer to the PBGC is what critics say could take a big bite out of the pension amounts for the salaried retirees. Lee said the public deserves to know why and how the decision was made.
“We need transparency, that’s what the Obama Administration has talked about,” Lee said. “We as taxpayers deserve to know. We’re going to keep pressing the issue.”
Lee and about 45 congressional representatives from 13 states have sent a letter to Rep. Barney Frank, chairman of the House Financial Services, and U.S. Sen. Christopher Dodd chairman of the Senate committee on Banking, Housing and Urban Affairs. According to the letter, if the salaried retires’ pensions are allowed to be transferred to the PBGC, the 15,000 retirees could lose anywhere from 20 percent to 70 percent of the pensions. Salaried workers lost their health and life insurance benefits back in April.
Last month, Lee and U.S. Rep. Brian Higgins were among 22 Congressional representatives who sent a letter to Treasury Secretary Timothy Geithner asking for the release of all documents concerning the proposal to move all salaried pensions to the PBGC. The representatives who signed the letters are coming from both sides of the aisle, Lee said.
“As time has gone on, we’ve seen a broader, more diverse group of congressmen behind us,” Lee said.
Also, a U.S. bankruptcy court approved a plan Monday for GM to buy back some plants from its former parts subsidiary, which includes the Lockport Upper Mountain Road facility. The buy-back is a part of GM’s bankruptcy exit plan, from which the company emerged from last week. However, the deal is not final: Approval is still needed from U.S. Bankruptcy Judge Robert Drain at a hearing July 23. Drain is overseeing the Delphi bankruptcy, which the company has been in since 2005. The company says it should emerge from bankruptcy this summer if its plan is approved.
Delphi was spun off by GM in 1999. As part of GM’s own bankruptcy negotiations, a deal was struck to buy back several plants from Delphi and help finance a private equity firm’s purchase of the remaining part of the company.
Currently, Platinum Equity has made an offer to purchase other parts of Delphi that GM is not taking back. The offer will be decided at the July 23 hearing, in which Delphi’s creditors will submit any objections to the plan.
Den Black, interim chairman of the Delphi Salaried Retiree Association, was pleased with the support from the members of Congress. The association met with the Automotive Task Force on April 24, asking that automotive salaried retirees be treated equally with their hourly counterparts.
“We are most grateful that Congressman Lee and the other elected officials are working to require an explanation,” Black said. “We have tried every other avenue to no avail. This is our last chance to obtain equitable treatment.”
The call for hearings is also supported by the General Motors Retiree Association, a national advocacy organization that aims to protect the pensions, health care, and other benefits earned by GM retirees.
Contact reporter Joe Olenick at 439-9222, ext. 6241.
The Associated Press contributed to this story
