Legal meetings for Delphi retirees to begin

By Don Shilling

Delphi salaried retirees plan a public rally in addition to legal action.

The filing of a class-action lawsuit covering Delphi Corp. salaried retirees is drawing closer as supporters begin two days of legal meetings today.

Leaders of the Delphi Salaried Retirees Association expect to emerge Wednesday with an agreement on the details of the lawsuit, said Chuck Cunningham of Howland, a former senior executive at Delphi Packard Electric.

Cunningham said the lawyers involved in the meetings in Detroit do not want to be identified yet.

The retirees are trying to stop Delphi from dumping its pension plan for its salaried retirees as it proposes to emerge from bankruptcy court. It is unfair that pensions for United Auto Workers members are being taken back by General Motors Corp., while those of the salaried workers are not, Cunningham said.

He said the retirees association thinks the federal automotive task force is involved in these pension decisions.

Cunningham said the association’s leaders have drawn this conclusion because Delphi is proposing to use federal money to finance its operations.

Delphi’s plan calls for Platinum Equity, a California investment firm, to bring the auto supplier out of bankruptcy with $3.6 billion in financing.

The Wall Street Journal said Platinum, however, will put up no more than $750 million. GM said Friday that it will use federal funds to give Delphi $2 billion and will provide $750 million in other financing.

GM, which used to be the parent company for Delphi, is to receive $30 billion in federal funds as part of its bankruptcy reorganization.

Cunningham said the retirees association intends to use the “court of law and the court of public opinion” to make its case that those involved with the Delphi reorganization are being unfair to the salaried retirees.

In addition to the planned lawsuit, the retirees association plans to file an objection in bankruptcy court to Delphi’s proposed plan. Also, a public rally is being planned for Warren.

The retirees association was formed in February when Delphi said it was eliminating health-care benefits for salaried retirees. The association was unable to stop those cuts.

Cunningham said Packard has about 1,500 salaried retirees in the area, but some of them retired earlier under GM.

He estimated that retirees would receive between 30 percent and 70 percent of their pensions if they are taken over by the federal Pension Benefit Guaranty Corp., which insures pensions.

The PBGC said it receives calls every day from workers at automakers and suppliers who ask if their pensions are safe. The answer is, “Yes, up to certain limits.”

Payout limits mean that some workers, particularly younger workers, will see benefit reductions if pensions are taken over by the PBGC.

The maximum benefit for a 65-year old who retires this year is $4,500 a month. The amount increases for older retirees and decreases for younger retirees. It also is reduced for those who want benefits for a surviving spouse. A 55-year-old who wants survivor benefits, for example, would receive $1,822 a month.

shilling@vindy.com