As the complicated, bewildering bailout of General Motors progressed, President Barack Obama said during his 2008 campaign that pensions should be protected.
Imagine the dismay of 20,000 salaried Delphi employees whose pensions were slashed, and imagine their shock when they realized union employees—the political term media uses is “hourly” employees—got their whole pensions.
The Tribune Chronicle (Ohio) said:
Many of the 20,000-plus salaried retirees and pension participants, including many of the roughly 1,500 retired salaried workers from Delphi Packard in the Warren area, saw pensions cut 30 percent to 70 percent in the government-led bankruptcy of General Motors Co. in the summer of 2009…GM, which received a loan and taxpayer bailout of nearly $50 billion, "topped up," or made whole, hourly workers' pensions.
Delphi was the primary parts supplier to GM.
The employees who got short shrift are getting some representation, from the Delphi Salaried Retirees Association. The Association summed up the difference in treatment of union workers and others:
Our hourly counterparts represented by the most powerful unions were chosen to be made whole on their pensions and will receive monthly "top-ups" from GM (funded by TARP dollars). No similar pension treatment was extended to us; and…We are the ONLY auto retirees, hourly or salaried, to have worked two-thirds or more of our careers for a Big Three company to have lost part of our pensions – in our case 30-70 percent…
Obama administration officials testified under oath that the decision was made by the Pension Benefit Guaranty Corp., a government agency with legal authority to decide such matters.
The Daily Caller investigated and obtained emails that suggest the Obama administration officials might not have given an accurate statement. TDC said the emails show:
The U.S. Treasury Department, led by Timothy Geithner, was the driving force behind terminating the pensions of 20,000 salaried retirees at the Delphi auto parts manufacturing company.
Treasury had no legal right to be involved in such decision-making. That the U.S. taxpayer covered the bailout adds fire to the flames.
The PBGC has faced predictable stress in an economy that remains stagnant despite hundreds of billions of taxpayer dollars redistributed by a Democrat Congress and president.
The Washington Post said in November, 2010, the PBGC annual deficit “increased 4.5 percent to $23 billion.” The Post said PBGC insures the pensions of 1 in 7 Americans, but the paper didn’t note that solidity comes courtesy of the U.S. taxpayer guarantee.
Obama’s most influential adviser, Valerie Jarrett, declined to offer comments to TDC about the situation.
State and other public pension funds are also believed to be heading towards a crisis. In July, Reuters quoted an expert:
"Failing to understand the scope of the pension crisis sets taxpayers up for a bigger catastrophe in the future," said Bob Williams, president of free-market think-tank State Budget Solutions, in Washington.
The Delphi Salaried Retirees Association president told media, "We believe the PBGC decision was either influenced or made by the Treasury Department.”
Besides The Daily Caller and some conservative media, the Delphi pension controversy has received little attention from traditional media.
Ohio, where thousands of salaried Delphi workers lost their pensions while union workers were covered, is considered a swing state in the 2012 election.
(Commentary by Kay B. Day/August 8,2012)
Related at The US Report