Nonunion Auto Retirees Cry Foul in Treasury Deal; Ex-Delphi Workers Cite Pension Inequity

The Washington Times (Washington, DC), December 24, 2009 | Go to article overview

Nonunion Auto Retirees Cry Foul in Treasury Deal; Ex-Delphi Workers Cite Pension Inequity


Byline: 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. …

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