Pension plan irks Delphi retirees

By Don Shilling

Salaried retirees stand to lose between 30 percent and 70 percent of pensions, a former executive says.

Salaried retirees of Delphi Corp. are considering legal action to block what they fear will be a devastating cut to their pensions and severance pay.

Retirees in several states, who banded together in an unsuccessful effort to keep their health insurance, now are protesting Delphi’s plan to drop their pension plan, local retirees said.

“We’re going to put every bit of pressure on them that we can to have justice,” said Chuck Cunningham of Howland, a former senior executive at Delphi Packard Electric in Warren.

Delphi stirred the anger of its retirees Monday when it announced that it had reached a deal to emerge from bankruptcy court protection under the control of Platinum Equity, a California investment firm. General Motors, which spun Delphi off as a private company in 1999, is in support of the deal, which must be approved in court.

Delphi said that it explored “numerous alternatives” to keep the salaried pension plan but none were feasible. It said the federal Pension Benefit Guaranty Corp. may terminate the plan and take it over.

A Delphi spokesman could not be reached for comment.

Bruce Gump of Howland, a former senior engineer at Packard, said this move is unfair because Delphi plans to turn over a pension plan for hourly retirees over to GM. The salaried retirees should become part of the GM plan as well, he said.

Many salaried retirees will see a pension reduction of between 30 percent and 70 percent if they are taken over by the PBGC because of formulas the agency uses to limit payouts, Cunningham said.

In addition, Delphi is proposing that monthly severance payments would stop, he said. Delphi encouraged many executives to leave by offering them payments for one year, he said.

The latest effort to fight these changes involves many Warren area residents, Cunningham said. They are part of the Delphi Salaried Retirees Association, a multi-state group that formed in February when Delphi said it was eliminating health-care benefits for salaried retirees. The group lost a battle in court to save the benefits.

Gump heads up the Warren legislative committee of the association, which has been working to push new federal laws to protect retirees. The committee quickly switched gears this week and is coordinating efforts on possible legal action with retirees in Michigan, Indiana, New York and Tennessee.

“This is a fight that Delphi started. All we’re trying to do is defend ourselves,” Gump said.

Cunningham said he and his wife, Mary Beth, jumped into the fight this week because of their anger.

He retired seven years ago as business-line executive in charge of all of Packard’s wiring business. His wife retired Dec. 31 as director of global operations.

“Unlike others, we’re in a pretty good position, but there are going to be a lot of people who are going to be devastated by this,” he said. He said he expects objections to be filed in bankruptcy court within days.

The retirees also are talking with law firms about a possible class-action lawsuit.

shilling@vindy.com