Searching For The Truth About Delphi

 

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.

That agreement, however, was liquidated when GM itself entered bankruptcy and emerged as a new company, according to bankruptcy expert Todd Zywicki.

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.

 

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Those Pesky E-Mails

Investors.com posted an article today about the latest scandal in the Obama Administration. You may not see this in the major media–they are too busy trying to distract the public with shiny objects–but it is an indication of how things work in the Obama Administration.

The article deals with GM’s Delphi auto parts unit and how its non-union employees were dealt with during the GM bailout.

The article reports:

The news site The Daily Caller has obtained internal government emails that show the U.S. Treasury Department, led by Timothy Geithner, pushed in 2009 to end the pensions of 20,000 non-union employees of GM’s Delphi auto parts unit as part of the auto bailout.

What’s truly outrageous is that, while those workers were cheated of their full pensions, union employees of the same Delphi company got their pensions paid.

This financially ruinous favoritism of union workers over nonunion workers is blatantly unfair, illegal and a violation of Constitutional guarantees of equal treatment under the law. And the reason is political.

This is one of many examples where government agencies were used for political purposes (paying back union supporters or wealthy donors) in the Obama Administration.

The Pension Benefit Guaranty Corporation (PBGC) is responsible for overseeing private pensions. This organization is an independent, quasi-governmental insurer of private pension plans. Under law, that organization would have had the authority to determine how the pensions were handled.

The article further reports:

The email trail shows clearly that in April 2009 the Treasury Department held meetings on GM and Delphi, including “pension issues.” However, the PBGC was, in the words of one official, “disinvited.”

This was well before the decision, made in July, to stiff nonunion workers on their pensions. It suggests that the White House and Treasury were calling the shots — not the compromised, and politically bullied, PBGC.

This violates PBGC’s independence under the law as the sole agency that can terminate a private pension — not Treasury. Worse, the PBGC, based on the emails, seems to have thought it needed to clear whatever it did with the White House and Treasury. It didn’t.

There is also the question of whether or not several White House officials may have lied under oath when questioned about the decision on the pensions.

The Obama Administration has taken political cronyism to a new level. It is time to vote them out of office.

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