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Delphi update: More White House meddling in UAW bailout revealed

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By Michelle Malkin  •  June 23, 2011 12:57 PM

If you paid attention here last fall, you know all about how Obama Treasury officials screwed over non-union white-collar workers at Delphi, a leading auto parts company spun off from GM a decade ago.

See my September 2010 Special Report– The Delphi disaster: An economic horror story Obama won’t tell. (More background links below.) A refresher:

The White House believes it can win back depressed and economically stressed voters by turning President Obama into the storyteller-in-chief again. But victims of Obama’s Chicago politics don’t want to hear any more of his own well-worn tales of struggle and sacrifice. They’ve got their own tragedies to tell — heart-wrenching dramas of personal and financial suffering at the very hands of Obama.

Consider the real-life horror story of 20,000 white-collar workers at Delphi, a leading auto parts company spun off from GM a decade ago. As Washington rushed to nationalize the U.S. auto industry with $80 billion in taxpayer “rescue” funds and avoid contested court termination proceedings, the White House auto team schemed with Big Labor bosses to preserve UAW members’ costly pension funds by shafting their nonunion counterparts. In addition, the nonunion pensioners lost all of their health and life insurance benefits.

The abused workers — most from hard-hit northeast Ohio, Michigan and neighboring states — had devoted decades of their lives as secretaries, technicians, engineers and sales employees at Delphi/GM. Some workers have watched up to 70 percent of their pensions vanish.

John Berent of Marblehead, Ohio, lost one-third of his pension: “I worked as a salaried employee for GM (30 years) and Delphi (10 years). After 40 years of dedicated service, I was forced to retire. Then Delphi terminated my health care, life insurance, vision, dental, then terminated the pension plan. Everything I worked 40 years for was wiped out.”

Kelly Fabrizio of Franksville, Wis., saw her pension reduced by 55 percent after working 30 years at Delphi/GM: “I am truly scared for my future. Every day I wake up, shake my head and say out loud — This Is Not How It Was Supposed To Be.”

Roger Hoke of Columbus, Mich., and his wife were both longtime Delphi workers. His pension shrunk by more than 40 percent: “After 33 years with GM and another 10 with Delphi, what did I do wrong to deserve such a fate?”

Paul Dobosz of the Delphi Salaried Retiree Association, which represents the pensioners and is suing the feds, recounts how they got screwed: The Auto Task Force hatched a plan to dump their pensions on the federally run Pension Benefit Guaranty Corporation, which slashed their benefits. At the same time, the White House and Treasury officials devised “a clever way to make the UAW pensions whole using GM and TARP money to accomplish it. The scheme was documented in sworn depositions (that) revealed … that some groups of workers were more ‘politically sensitive’ and would be afforded special treatment (i.e. subsidy using TARP money) while others less politically worthy would be left out.” The PBGC, which had the fiduciary duty to represent the best interests of all the Delphi workers, helped sacrifice the non-union employees at the UAW altar.

In other words: Obama’s team of auto-crats — stocked with Big Labor-friendly appointees and self-admitted know-nothings about the car industry — decided to “cherry pick” (one Obama official’s own words) which obligations the new Government Motors company would assume and which they would abandon based on their own political whims and fealty. Due process and equal treatment of union and nonunion workers be damned.

Yesterday, the House held a hearing on the Delphi outrage, and testimony fleshed out what I reported last fall. TheDC’s Matthew Boyle reports on details of new e-mails showing the extent of meddling by Team Obama:

At a Wednesday hearing, the House Oversight Committee’s Subcommittee on Regulatory Affairs, Stimulus Oversight and Government Spending started pushing the Treasury Department for answers on the effects of the bailout and on how much of a role the department played in picking winners and losers.

The key point of the Wednesday hearing was to show that the Obama administration advised GM on how to eliminate the Delphi workers’ pensions. The evidence suggests Geithner’s team played a significant role in that process, despite claims to the contrary.

In 2009 congressional testimony, senior Obama administration official Ron Bloom said the president told the Treasury Department to stay out of the management of these companies and downplayed any administration intervention.

“From the beginning of this process, the President gave the Auto Task Force two clear directions regarding its approach to the auto restructurings,” Bloom said then. “The first was to behave in a commercial manner by ensuring that all stakeholders were treated fairly and received neither more nor less than they would have simply because the government was involved. The second was to refrain from intervening in the day-to-day management of these companies.”

But the emails TheDC obtained show high-ranking Treasury Department officials, including Matthew Feldman of Treasury’s Auto Task Force, corresponding with senior GM officials on how to make certain decisions regarding who was going to win and who was going to lose.

“Have you guys begun a dialogue with the UAW over your desire to see the hourly plan terminated?” Feldman asked GM’s Rick Westenberg and Walter Borst in June 2009. This email shows Feldman and the Treasury Department were involved in GM’s day-to-day management.

“One concern I have is that while the PBGC [Pension Benefit Guaranty Corporation, a federal agency that handles private-sector pension benefits issues] is likely to agree to terminate, it’s not clear what position they will take on the Benefit Guaranty,” Feldman continued in that email, demonstrating his involvement in union negotiations. “At a minimum this could get messy and the UAW should probably be brought into the loop.”

If only the activist Left media were as interested in these e-mails as they were in Sarah Palin’s…

Delphi retirees raised their voices. One summed it up well:

Declaring that salaried retirees have lost houses, declared bankruptcy and seen families dissolve, local Delphi Corp. retiree Bruce Gump on Wednesday told a Congressional subcommittee that the group will continue to fight to reclaim benefits earned over decades with the auto parts supplier.

“We will stand on the side of right and will fight. We need your help to win,” the retired Delphi Packard Electric engineer said in testimony before the House of Representatives’ Subcommittee on Regulatory Affairs, Stimulus Oversight, and Government Spending in Washington about the government’s impact in bailing out General Motors and Chrysler during Great Recession of 2008-09.

Gump called cuts by federal pension insurer Pension Benefit Guaranty Corp. of 30 percent to 70 percent in monthly pension checks for younger Delphi workers “political, illegal, unethical and immoral.

“Even though the government is charged with protecting all citizens, they did nothing for the salaried,” he said. “They cared for the groups that were rich and large enough to retaliate.”

This LA Times article casts the fight for Delphi workers as a partisan GOP battle: “Obama administration favored union worker pensions in GM bailout, House Republicans say.”

Attention, LA Times: Ohio Sen. Sherrod Brown, who has called out the Obama administration over the issue, is a Democrat:

Ohio’s own Senator Sherrod Brown has placed an indefinite hold on President Obama’s nomination of Joshua Gotbaum to head the Pension Benefit Guaranty Corporation in a bid to force the Obama administration’s intervention on behalf of retired Delphi workers whose pensions were jeopardized by GM’s bankruptcy last year, the Pee Dee is reporting.

For those who don’t know, the PBGC takes over the pensions of failed companies. Typically, they can continue to provide pension payments, but usually about half of what was previously promised to the retired workers by their former employers…

…The issue over which Sen. Brown is holding Gotbaum’s nomination is this: when GM declared bankruptcy, it agreed to supplement the PBGC pensions for Delphi UAW retirees, saying it was obligated to do so by its contract. However, non-union former Delphi employees received no such supplement. Brown is pressing that the government, which owns 60% of GM as the result of the old GM’s bankruptcy and subsequent rescue by the government, should intervene to force the new GM to make good on its pension promises to its non-union as well as union Delphi retirees.

***

Background:

October 6 2010 Document drop: Another federal investigation launched into Delphi Disaster

September 24 2010 The Delphi disaster: Judge refuses to dismiss non-union pensioners’ charges

September 22 2010 Special Report– The Delphi disaster: An economic horror story Obama won’t tell

UAW Bailout: White House Kneecapped White-collar Pensioners

Nonunion Delphi Retired Employees Get Shaft in Auto Bailout

Oversight Committee Republicans Question Politicization of Delphi Bankruptcy Deal

Boehner and Wicker Request GAO Report to Investigate Delphi Pension Treatment

Delphi pension dispute due for federal probe

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