Two area U.S. House members accused President Barack Obama’s administration of picking winners and losers at a congressional hearing to discuss the inequitable treatment given to Delphi retirees.
U.S. Reps. Bill Johnson of Marietta, R-6th, whose district includes all of Columbiana County and a portion of Mahoning County, and Mike Kelly of Butler, Pa., R-3rd, who represents most of Mercer County, criticized the Democratic president’s administration for how it handled pensions for Delphi retirees.
That came during a Tuesday hearing of the U.S. House Oversight and Government Reform Committee’s Subcommittee on TARP (Troubled Asset Relief Program) and Financial Services.
The subcommittee in the Republican-controlled House titled the hearing: “The administration’s auto bailout and the Delphi pension decision: Who picked the winners and losers?”
The hearing included testimony from ex-auto czar Ron Bloom and former auto task force members Matthew Feldman and Harry Wilson about how decisions were made regarding the pensions of former Delphi workers.
Delphi retirees had their health care coverage and life insurance eliminated as well as pension cuts of 30 percent to 70 percent when the company declared bankruptcy in 2009 and the Pension Benefit Guaranty Corp. took over their pensions.
Hourly retirees, largely United Auto Workers union members, were fully covered when General Motors, which received a bailout from the federal government, agreed to make up the difference between what the PBGC paid and what their pensions were supposed to be.
But salaried employees didn’t receive the same benefit. There are about 20,000 Delphi salaried retirees with about 1,500 of them in the Mahoning Valley.
“How can you say all parties were treated fairly?” Johnson asked Bloom, Feldman and Wilson.
Kelly, who owns a GM dealership, said the “government interfered with the natural flow of the business market” with the bailout. “They picked winners and losers.”
If the government didn’t get involved in the auto bailout, “it would have been worked out,” he said. “The problem was it cost too much money to build [vehicles] here.”
Several committee members, primarily Republicans, grilled Bloom, Feldman and Wilson, who defended the auto bailout, during the nearly three-hour hearing.
Among the most tenacious was U.S. Rep. Mike Turner of Centerville, Ohio, R-3rd, who started the hearing by saying the “happy train of silence” on the Delphi pension system ends Tuesday.
But at the end of the hearing, Turner expressed frustration with what the three key players had to say about the process.
Feldman, who was the auto task force’s legal adviser, said GM made the decision to cover hourly retirees at Delphi, its largest supplier, because it was a “reasonable and necessary decision” that was “critical to ensuring an uninterrupted supply chain.”
Government bailouts of private companies are “almost never acceptable,” Wilson said, but this had to be done “because we were on the edge of abyss” with the auto industry if the federal government didn’t step in.
Bloom said, “We all have great sympathy for those affected” by the loss of benefits and pension cuts. Wilson said “the human costs” of the bailout were “tragic,” including what happened to the Delphi retirees.
The three repeatedly said they didn’t recall politics playing a factor in the Delphi decision.
The three also said they would cooperate with a special inspector general investigation into TARP, with Wilson saying he was “too busy” to do so previously.
Bruce Gump, vice chairman of the Delphi Salaried Retirees and a retired Delphi senior engineer, said not much came out of the subcommittee hearing.
The three “tried to avoid being held accountable,” Gump said. “All we want is the truth. If the truth comes out, our opinion is it will support our position.”
The Delphi salaried retirees treatment has become an issue in the presidential election.
The campaign of Mitt Romney, the presumptive Republican presidential nominee, has accused Obama’s administration of “stonewalling” and breaking promises.
Obama’s campaign counters that without the president stepping in to save the American auto industry, Delphi likely would be gone and all its employees would have lost their jobs. The campaign also accuses Romney of using the Delphi retirees to “score cheap political points.”