The Washington Free Beacon and the Daily Caller have both posted articles about how the bailout of the automobile industry was handled in regard to Delphi, a company which supplies electronics and technology to the auto industry.
The Daily Caller posted an article stating that the decision to end the pensions of the non-union workers at Delphi was not made independently by the Pension Benefit Guaranty Corporation (PBGC), the federal government agency that handles private-sector pension benefits issues, but that the decision was the result of pressure from the Treasury Department. They have uncovered a chain of e-mails that backs up this conclusion.
The Daily Caller reports:
The email chain was titled “Delphi Hourly Plan.” Delphi’s unionized hourly retirees originally saw their pension plans terminated together with the nonunion Delphi salaried retirees’ plans in a process that commenced on July 31, 2009.
Later, in September 2009, the union retirees’ plans were topped up while nonunion retirees’ plans remained terminated.
These emails contradict July 2012 congressional testimony Feldman (Treasury official Matt Feldman) gave during an investigation by the subcommittee on TARP, Financial Services and Bailouts of Public and Private Programs.
The treatment of Delphi employees is becoming a campaign issue in Ohio, where many of its employees were located. Paul Ryan met with nine Delphi retirees who lost their pensions, while their union coworkers pensions were untouched.
The Washington Free Beacon explains some of the details of the bailout:
Delphi was an important element of the auto-bailout. The company, one of GM’s largest parts suppliers, had been in bankruptcy since 2005 and Treasury officials recognized that it would need to be lifted from bankruptcy along with GM.
To cut costs, the Pension Benefit Guaranty Corporation (PBGC), an independent federal insurer of retirement systems, terminated the nonunion plan while GM volunteered $1 billion to top-off pensions belonging to the United Autoworkers union.
The administration has contended that GM was acting on a 1999 agreement with the union to close any pension gap that emerged if Delphi declared bankruptcy.
“General Motors’ decision to guarantee the obligations of a separate company—Delphi—was completely unjustified under established principles of bankruptcy law, and it increased the cost of the taxpayer bailout of the automotive industry by more than $1 billion with no reciprocal benefit to General Motors,” he told Congress in July.
The auto industry bailout is an example of the government interfering with the laws of bankruptcy and acting in total disregard to the law. It’s time to bring people into Washington who respect the laws of this country.