Ryan goes to bat for 11,500 worried retirees of Delphi

Packard retirees under 65 stand to lose all of their health-care benefits.

By Don Shilling

WARREN — U.S. Rep. Tim Ryan has stepped in to help Delphi Packard Electric retirees who fear they are about to lose their health-care benefits.

Ryan of Niles, D-17th, has written letters and spoken to members of the Obama administration on behalf of both hourly and salaried retirees.

Ryan’s concern is that thousands of area retirees who are under 65 could lose all of the health-care benefits in the bankruptcies of General Motors and Delphi Corp., said Sean Buchanan, district counsel for the congressman.

Delphi Packard has 10,000 hourly employees who have retired from its area plants.

Those who are at least 65 are covered by Medicare as their primary insurance, so they would be less affected by a loss of company benefits.

Those who are under 65 would be left without any insurance if company benefits are lost, said Karen Krolopp, president of Local 717 of the International Union of Electrical Workers in Warren.

Neither Delphi nor GM, who used to be Delphi’s parent company, wants to be responsible for the benefits of hourly workers, Buchanan said.

“They are playing hot potato with the retiree benefits,” he said.

The congressman also is trying to salvage benefits for salaried retirees. Delphi has eliminated those benefits, which has sparked an outcry among the salaried retirees. Packard has about 1,500 salaried retirees from area offices and plants.

The hourly IUE retirees thought their benefits would be covered by GM under a special trust called a VEBA, Buchanan said. The arrangement was to be similar to the VEBA created to pay for the benefits of United Auto Workers retirees, but the IUE’s version never was not completed.

Krolopp said GM had agreed to accept all IUE retirees but now is treating the IUE differently because the automaker no longer has manufacturing plants represented by that union. The last IUE plant, which was in Moraine, Ohio, was closed recently.

Krolopp noted that the UAW agreed to concessions that required retirees to give up dental and vision coverage, but at least they maintained their health insurance.

“The IUE retirees are being discriminated against,” she said.

Susan Garavaglia, a GM spokeswoman, said she could not comment on benefits of IUE retirees because they are Delphi’s responsibility.

Lindsey Williams, a Delphi spokesman, said many of the IUE retirees remain with the auto supplier, but some have transferred to GM. He said more are scheduled to transfer to GM if Delphi emerges from bankruptcy court. The supplier filed for bankruptcy in 2005.

Buchanan said GM and Delphi have been disputing the responsibility for retirees throughout GM’s bankruptcy case.

For now, it seems that recent retirees are with Delphi, while people who retired further back are with GM, he said.

In the end, however, it may not matter which company gains responsibility for the benefits because neither is expected to have funds to meet all of the health-care obligations, he said.

GM created a new company that emerged from bankruptcy court last week with manufacturing plants that will make Chevrolet, Cadillac, Buick and GMC vehicles.

Krolopp said, however, that the IUE benefits have been placed with a company that remains in bankruptcy court. This company has been named Motors Liquidation Co. and it is expected to languish in bankruptcy court for years as it sells unwanted assets, such as closed manufacturing plants.

Krolopp said she doesn’t expect the sale proceeds will be enough to cover the liabilities that GM is leaving behind.

Delphi has a bidder that wants to take over its operations, but little or no money is expected to be left over for retiree benefits, Buchanan said. Whether any benefits can be retained is uncertain, but Krolopp stressed that nothing has changed yet. Benefits are continuing to be paid.

Krolopp said the union is hoping that GM will file a motion in its case that will allow for changes in the benefits to be negotiated with the union. It would be better to negotiate concessions than deal with the uncertainty of a bankruptcy judge settling an underfunded estate, she said.

shilling@vindy.com