Delphi White-Collar Pensions Need Fair Treatment, GM Told
07 Juli 2009 - 12:56AM
Dow Jones News
U.S. lawmakers are pressing General Motors Corp. (GMGMQ) to make
pension payments to bankrupt Delphi Corp.'s (DPH) white-collar
workers, as GM has agreed to do for Delphi's hourly employees.
The potential loss of pension benefits for Delphi workers has
become a heated issue on Capitol Hill. Some lawmakers have accused
GM and the Obama administration of favoring Delphi's blue-collar,
hourly workers at the expense of salaried employees.
Discussions among GM, Delphi and the Pension Benefit Guaranty
Corp., the government agency that backstops corporate pension
plans, are ongoing. Under a tentative plan, pensions for both
salaried and hourly Delphi workers would go to the PBGC. But hourly
workers would receive supplemental payments from GM, under an
arrangement that dates back years when Delphi was spun off from
GM.
U.S. Sen. Charles Schumer, D-N.Y., whose state includes many
Delphi workers and retirees, urged GM on Monday to assume
obligations for Delphi's salaried retirees as well.
"The salaried employees worked side-by-side with the hourly
employees for decades and, therefore, this divergent treatment
strikes me as unfair," Schumer wrote in a letter to GM Chief
Executive Frederick "Fritz" Henderson.
A GM spokesman declined comment.
A PBGC takeover of Delphi pensions raises the likelihood that
payments will be slashed, since federal law limits such
payments.
Hourly, blue-collar workers often belong to unions, a key voting
segment. The Obama administration has been accused of treating auto
unions favorably at the expense of other stakeholders in the
restructuring of the auto industry. The administration is
overseeing the restructuring of GM.
In a letter to Treasury Secretary Timothy Geithner last month,
more than a dozen members of Congress demanded an explanation for
the decision to have the PBGC assume the pension plans for Delphi's
salaried retirees.
"We respectfully ask that you direct the Auto Task Force to make
public all documents concerning how this decision was reached,"
stated the letter, which was drafted by New York Congressmen
Christopher Lee, a Republican, and Brian Higgins, a Democrat.
A Treasury spokeswoman declined comment.
- By Josh Mitchell, Dow Jones Newswires; 202-862-6637;
joshua.mitchell@dowjones.com