"Nonunion auto retirees cry foul over deal"

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Nonunion auto retirees cry foul over deal

William Ehart and Andrea Billups THE WASHINGTON TIMES

Decades ago, when Deborah Hampton was a young divorced mother of two,
her father encouraged her to go to work for his employer, General
Motors Corp.

Just as GM used to be considered a safe stock that parents could buy
to help secure their children's financial future, it also used to be a
company where a concerned father could feel his daughter's future was
secure.

Thirty-one years later, Mrs. Hampton is set to lose as much as $1,700
of her monthly pension from auto-parts supplier Delphi Corp., which
was spun off from GM in 1999. Her employer-provided health insurance
-- Mrs. Hampton has diabetes and a family history of glaucoma -- was
canceled last month.

"Every morning you wake up and go, 'Oh, my God, here's another day of
struggle,' " said the 59-year-old grandmother from Grand Blanc, Mich.
"I say my prayers every day at the same time for a half an hour. I
ask, 'Please don't let us spiral into poverty.' "

The former executive secretary and 22,000 other Delphi salaried
retirees understand these are hard times for everyone, especially
those in the auto industry -- but they feel discriminated against
because they did not belong to a union.

That's because GM is making up a $4.3 billion pension shortfall for
its union workers and retirees who split off with Delphi, but not the
$2.5 billion shortfall for salaried workers and retirees. About 46,000
union retirees are involved.

About 400 retirees at American Axle & Manufacturing are also affected,
even though they never worked for Delphi. The company was created in
1994 when GM sold five plants to American Axle. GM kept those workers'
pensions, then placed them with Delphi after the spin-off.

Delphi, based in Troy, Mich., has since closed most of its North
American plants. Its current salaried employees' pensions are also
being slashed.

Mrs. Hampton, who supports President Obama, doesn't understand why the
salaried retirees and employees were singled out and wants the
government to make them whole, too.

Just as the Democratic administration was accused of tilting the
playing field in favor of its union allies in other aspects of GM's
bankruptcy, salaried Delphi retirees say the union pension deal is
unfair.

Last spring, as reported in a series of stories published by The
Washington Times, individual GM bondholders complained that the United
Auto Workers union got a greater equity stake in the new, post-
bankruptcy GM than it deserved, leaving bondholders with pennies on
the dollar for their investments.

Auto dealers also claim that they bore the brunt of cutbacks at GM and
Chrysler Group LLC in part to spare more pain for union workers.

"We have been discriminated against overtly by our federal government,
which chose winners and losers between the union and nonunion
individuals," said Den Black, interim chairman of the Delphi Salaried
Retirees Association.

"We don't begrudge the union retirees. We're happy they have remained
whole; they earned it. We're not asking for something we didn't earn,"
he said.

Mr. Black said the salaried workers didn't necessarily earn more than
the union workers, especially after overtime was taken away from the
white-collar group in the 1980s. Salaried workers include
administrative staff, purchasing managers, bookkeepers, clerks and
engineers such as Mr. Black.

In some communities around former Delphi plants -- places like Flint,
Mich.; Kokomo, Ind.; Warren, Ohio; and Lockport, N.Y. -- the union and
nonunion workers live side by side.

GM spokeswoman Julie Gibson said that when Delphi was spun off, GM
agreed in the union contract to top up the pension of Delphi's hourly
employees if it ever fell short of what they would have gotten had
they remained with GM.

There was no such agreement for the salaried workers, she said.

Mr. Black said that as a bankrupt company, GM was freed of all its
contractual obligations. But Ms. Gibson said some contracts remained
in force.

All of GM's funding -- including the money it is using to make early
payments on its federal loans -- has come from the U.S. government,
whether in the form of loans or cash in return for a nearly 61 percent
equity stake.

"It was the U.S. Treasury that owned the majority share in GM that ran
the whole train. None of this was driven by contractual obligations.
This was driven by political considerations and Treasury telling GM
what it would do," he said.

Retirees from the IUE-CWA union, who also had no pension agreement
with GM, were made whole by GM after Congress held hearings on the
Delphi pension situation.

The Senate Committee on Health, Education, Labor and Pensions, chaired
by Sen. Tom Harkin, Iowa Democrat, held a hearing on Oct. 29; a
similar hearing was held in the House on Dec. 2.

Sen. Michael B. Enzi, Wyoming Republican and ranking member of Mr.
Harkin's committee, wrote a letter the same day to Treasury Secretary
Timothy F. Geithner demanding information on how the pension decisions
were made.

Mr. Enzi has not received a response, a spokesman said.

A Treasury spokesman said the administration did not make the decision
or play a central role in it.

Mr. Black, 63, who now lives in Chesapeake, Va., retired in 2001 after
36 years -- only the last two of them with Delphi. He says he invented
a more fuel-efficient air-conditioning compressor in the 1980s that
earned billions in sales for GM.

Without such inventions and others by his fellow engineers, thousands
of workers would not have had jobs, he said.

The retirees have filed suit in federal court in Michigan. The court
will hear arguments next month on their motion to stop the Pension
Benefit Guaranty Corp. from reducing monthly pension checks -- as it
is scheduled to do in January or February -- until their case has been
resolved.

PBGC officials acknowledge the Delphi case is unprecedented, but
declined to comment further.

To help protect the Delphi pension fund during the company's
bankruptcy, which it exited in October, the PBGC placed liens the
retirees say are worth up to $4 billion on Dephi's foreign assets and
could have funded the salaried retirees' pensions. Delphi made no
contributions to the funds while it was in bankruptcy.

Yet the PBGC's liens were interfering with the resolution of Delphi's
bankruptcy, which had dragged on for four years. The government was in
a hurry to complete GM's bankruptcy restructuring, and the Delphi
liens needed to be lifted so its assets could be sold to its lenders
and to GM. Mr. Black suggested that Treasury dictated the move.

Papers filed in GM's bankruptcy case last spring state "GM, Delphi,
the PBGC and the U.S. Treasury have engaged in discussions regarding
an agreement to satisfy these conditions and render saleable the
assets subject to PBGC's lien."

When pensions are taken over by the PBGC, the agency establishes a
scale according to which the lowered pension amounts will be paid.
Some Delphi retirees may receive nearly all their pensions, but many
face cuts ranging from 30 percent to 70 percent.

Older retirees receive more of their pensions. Younger retirees who
were induced to retire in their 50s, a common occurrence in corporate
America, might lose their pension benefits completely.

Companies promise generous pension bonuses called supplements to those
who agree to retire early. But the PBGC doesn't pay those supplements.

Thus, thousands of early retirees from the auto sector are trapped in
multiple ways, including Mrs. Hampton.

She and her second husband, Gary, 61, who lost his job in the mortgage
division of GMAC Financial Services, are not old enough to qualify for
Social Security or Medicare. He is having difficulty finding work in
the auto-disaster zone that is Michigan's economy. The Hamptons are
unable to sell their home.

Mrs. Hampton's father died in 1983, two years after retiring from GM.
Her mother has passed away, too. She has no brothers or sisters, thus
nobody to call for help.

"That supplement was promised to us; it was supposed to be the
bridge," she said, the fear rising in her voice.

"I don't want to come off sounding like a whiner; a lot of people are
in trouble. But most of us are absolutely panicked. I put out my
Christmas decorations this year thinking, am I going to even be here
next year?

"What kind of retirement is that, filled with worry? I worked hard my
whole life, and this was promised to us.

"I'm so bitter," she said. "I'm hurt; I'm stressed. I'm just hanging
onto my fate to try to see that the right thing will be done by us."

 

Read all before you flame me.
Waa waa! Should have joined or started a union shouldn't they have? Now
they are at the mercy of the "Right to workers". Ironic name isn't it?
They say they want to protect you from unions when in fact they are in
bed with business and their goal is to circumvent the workers rights so
they can get the labor as cheaply as possible without regards for the
welfare of the worker. The worker is just a tool to be used and
discarded when they are of no use to the business. "Be a good retiree
and die as soon as possible."
I had a boss who, when he got promoted to being my boss, stated that at
his last job he had just had to lay off 250 employees. They, fortunately
for the boss, were non union and their jobs got sent south. He stated
that as he watched the last men leave the plant for the last time all he
could think of was how proud he was and how proud those men must be to
sacrifice for the greater good of the company.
Twisted.

 

sounds more like GMs problem than mine.


but then again if GM would stop spending 5 million a year on stupid stuff
for their retirees like free Viagra for them, then maybe they would have
more money to put it where it belongs. kinda like buying a new set of wiper
blades when your transmission going out.....