There’s no joy in watching others lose pensions, benefits
According to a study conducted at Youngstown State University, we are all in danger of becoming collateral damage in the battle among Delphi salaried retirees, General Motors, Delphi, the bankruptcy court, the Pension Benefit Guaranty Corp., President Barack Obama’s Auto Task Force and Congress.
To varying degrees, all those entities are involved in deciding how much of their retirement benefits Delphi salaried retirees should get. It’s a complicated legal issue, a complicated economic issue and a complicated moral issue.
The bankruptcy court has an obligation to see that legitimate claims by creditors are honored, given the limited assets that are available. The company and its officers have an obligation to shareholders and employees that can best be preserved by saving whatever part of the business is salvageable. The PBGC has an obligation to preserve a portion of the retirement benefits employees are entitled to, but only a portion, and not supplemental retirement benefits that are typically part of early retirement incentive plans.
All of this is made even more complicated by the fact that Delphi, for decades a division of General Motors, was spun off, but General Motors made a number of commitments to Delphi and its workers during and after the split. Both corporations have been through bankruptcy, and, in General Motors’ case, the reorganized company emerged from bankruptcy as a quasi-government entity.
The uncomfortable fact of the government’s investment in GM is what makes it a matter of interest for Congress when various employee classes — UAW represented workers, IUE-CWA represented workers and unrepresented salaried workers — can point to disparities in how their pension claims and health-care coverage claims have been honored — or not honored.
Next stop, Congress
Congressmen from areas like the Mahoning Valley — which is to say congressmen primarily from various parts of Ohio and Michigan — are under increasing pressure to see to it that the government, Delphi and General Motors “do the right thing” — whatever that may be.
Here in the Mahoning Valley — once home to more than 20,000 GM and Delphi (Packard Electric Division) jobs, and now getting by with about a fourth of that — one thing is clear: To the extent that individual Delphi retirees are hurt, the Valley economy will suffer.
That’s the message brought home by the study done by Frank Akpadock, senior research associate at YSU’s Center for Urban and Regional Studies, at the request of the Delphi Salaried Retirees Association.
Those retirees stand to lose about $26 million a year in reduced pensions and increase health-care expenses. Removing such a lump of cash from the local economy has a multiplier effect that could mean thousands of jobs would be lost.
That’s why everyone here has a stake in Congress and the administration doing what they can to treat fairly those employees who worked for Delphi or General Motors for decades and were urged to take early pensions that they were told they had earned.
There is no doubt that other workers in other industries have gotten less than they thought they had coming in past economic meltdowns and bankruptcies. But this is not the time for those who have suffered in the past (or the present) to take pleasure in the misfortune of Delphi or GM retirees. Save the schadenfreude for another day. We’ll all be better off if the Delphi retirees are able to pay their mortgages, pay their medical and grocery bills and even have something left over to spend in other stores, shops and restaurants.