Delphi salaried retirees testify about pensions

By Don Shilling

Two local retirees of Delphi Packard Electric told a House subcommittee that their pension plans were improperly abandoned.

Howland residents Bruce Gump and Chuck Cunningham testified Wednesday in Washington, D.C., that they believe the federal Pension Benefit Guaranty Corp. should not have dropped liens it held in Delphi Corp.’s bankruptcy case so that the company could drop its pensions plans.

By testifying before the House subcommittee on Health, Education, Labor and Pension, the salaried retirees hoped to bolster their case that the PBGC should reconsider its decision that allowed Delphi to drop its pension plans, Gump said.

Delphi was in bankruptcy when the decision was made earlier this year, but the liens that the PBGC held were against the auto supplier’s profitable foreign operations, Gump said.

He said he was encouraged that the subcommittee members were interested in the case and were suggesting solutions.

“We could not have had a more receptive committee,” he said.

Possible steps to help the retirees include legislative funding, action by the Obama administration and an out-of-court settlement to a federal lawsuit filed by the Delphi Salaried Retirees Association.

The salaried retirees were joined at the hearing by Sen. Sherrod Brown, D-Avon, and U.S. Rep. Tim Ryan of Niles, D-17th.

Ryan noted that he hoped the testimony raises awareness that other parts of the auto industry were bailed out, but the salaried retirees were not given any aid.

General Motors, which used to be the parent company of Delphi, has agreed to make up the difference in pension cuts for hourly workers but not for salaried workers.

Gump said a “standard of fairness” was declared when GM agreed, with the approval of the U.S. Treasury, to make additional payments to the hourly retirees.

Gump said the retirees were told by administration officials that the salaried retirees are the group that was left without assistance because they were no longer adding anything to the company’s value. The Treasury was involved because of its investment in GM.

The salaried retirees face pension cuts of between 30 percent and 70 percent under the PBGC. They face pension reductions because the PBGC doesn’t recognize pension supplements that were issued to workers to encourage them to retire early.

Gump said the average salaried retiree will lose $300,000 over a lifetime.

He said the workers feel betrayed because they were assured when GM spun off Delphi in 1999 and when Delphi filed for bankruptcy that pensions were the “foremost priority.”

He said workers were assured that the pension plans were being properly managed, but in reality, funds were not being added as needed.

shilling@vindy.com