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Delphi retirees sacrificed



Published: Sun, July 29, 2012 @ 12:00 a.m.

While the auto bailouts were beneficial to the Valley and Lordstown continues to produce cars, the question remains: was it good public policy? What if GM had gone through a traditional bankruptcy or liquidation? The remains of GM might have evolved into multiple companies producing better cars at lower prices. Or it might have been economic Armageddon. We’ll never know for certain.

Clearly there are those who believe the Feds had no choice but to step in to save the industry. As a result GM was forced into a government managed bankruptcy, and it was then that things started to smell.

GM was a failed business model, having lost $39 billion in 2007. The financial crisis of 2008 was the final nail in the coffin. The bailout wasn’t perfect. Thousands of GM employees lost jobs, dealerships were forced to close, and the Obama administration played favorites, picking winners and losers. The UAW appeared to receive special consideration, some suggest, because of politics. Bankruptcy laws were turned upside down with secured creditors having to get in line behind unsecured creditors.

We are glad that GM is doing better today, but they have paid zero in federal income taxes despite record earnings in 2011 of $7.6 billion. According to the Treasury Department’s daily TARP report, GM still has $23.49 billion outstanding and unpaid. After receiving a cash infusion of $51 billion from TARP, special tax breaks worth billions, product liability exemptions, stimulus funds, $7,500 tax credits for Chevy Volt purchasers, billions for cash for clunkers, it’s clear that a lot of our money has been spent. Did we get a good deal? I’m not so sure.

Winners, losers

The charge that the administration picked winners and losers is most obvious with the situation involving former Packard Electric workers who retired from Delphi. Even though it had no legal requirement to do so, New GM agreed to “top-up” various pension programs of retired Delphi union workers at a cost of $1 billion, while letting pensions of salaried workers take losses up to 70 percent.

The TARP special inspector general had been trying for more than two years to get the facts surrounding this uneven treatment. Members of the automotive task force were asked to testify, but they refused to cooperate. Only when faced with a congressional subpoena did they finally appear.

By some calculations, the UAW received $26 billion in benefits, far more than they would have received if the bankruptcy had been handled in a normal way. Because of government interference, GM may have lost its best chance to fully rework itself into a truly competitive organization. Today President Obama rails against “outsourcing,” but taxpayer funded GM is poised to build yet another plant in China. This mammoth $1 billion assembly plant will build 300,000 cars per year. This is the same GM that is owned in large part by U.S. taxpayers and a UAW trust, and is building 70 percent of its vehicles outside the U.S. Obama’s hypocrisy is astounding.

Politically, Obama may have helped his friends, but here in Ohio there are tens of thousands of voters who were affected by this unjust treatment of Delphi salaried retirees. This is a problem that can be fixed without taxpayer funds. Obama should remember that as Ohio goes, so goes the White House.

Mark E. Munroe is chairman of the Mahoning County Republican Party.


Comments

1classics(53 comments)posted 1 year, 8 months ago

Nice save, Mr. President. Delphi is now a foreign owned company with most employees outside the U.S.. Guess that little tid bit was overlooked. The Salaried Retirees were robbed, no question, for political reasons.

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2InterestedInAll2(11 comments)posted 1 year, 8 months ago

Delphi moved 45,000 good paying manufacturing jobs overseas while the Obama Administration not only stood by and watched, but they actually encouraged them to hurry it up so they could exit bankruptcy faster. Same reason the President's Auto Task Force decided to terminate the Delphi pension plans. PBGC was Treasury's lap dog on this and acted because they were told to. Then the President's Auto Task Force coerced New GM into topping up the pensions of the hourly retirees (a good thing) but NOT the salaried retirees. Our area has taken an economic hit because Obama's cabinet wanted to make a political statement and sacrifice the salaried group in favor of the hourly group. Anybody NOT in a union (88% of the American work force - 93% of the private work force) should be very worried that Obama will somehow take what they earned away so his buddies in the big labor unions can have it. Fair is fair, and this is just wrong. He screwed the Delphi salaried retirees just for fun, and he'll do it to you too if you're not in a union!

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3Freeatlast(1991 comments)posted 1 year, 8 months ago

I feel sad for the salary of Delphi.
But they brought this on them self .
When they turned down the offer to join the union . They were told at the time this could happen . And remember they where the ones who made the bad decisions that help bring down Delphi.

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4ConservativeDude(36 comments)posted 1 year, 8 months ago

To say that the people who made the bad decisions that brought Delphi down is a mis-statement. The people who did that were not part of our team they were on their own self serving mission. Some even helped cut the deal to get us into the government bankruptcy.

Had G.M. gone through a normal bankruptcy the taxpayers would be better off and as Mark suggests, it would have had a chance to restructure and be a better company or companies.

Presidential candidate Mitt Romney has said this since the beginning of his campaign. Mitt did this for a living.

While I am at it, I want to ask people to vote for Mitt Romney for President. It is pretty clear what Obama is doing is not in the best intrests of ALL the people whether they voted for him or not.

This valley continues to do the same things over and over and we get the same results. We need our President to know how an economy works and what to do to fix it. We need a President that will de-regulate instead of regulate so the gears of the economy can turn freely.

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5jwhitehawke(87 comments)posted 1 year, 8 months ago

Freeatlast: Who gave away the Lifetime job agreement asnd brought Delphi from 14,600 employees to 600? The union. Who lied to the workers; telling them they couldn't join the UAW to protect THEIR own jobs? The union leaders. Who allowed low wage hirees to work next to existing high wage workers? The union. Who stole Millions from the sub fund? The union. Who brought the union back to parity when Delphi screwed you on your retirement benefits? The TAXPAYER..... Not the union. You are as brainwashed by greed as those that are used to living off subsidies at the taxpayers' expense. Socialism is is just another word for user ism.

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6classics(53 comments)posted 1 year, 8 months ago

Freeatlast, your statement shows how misinformed you are. In testimony by GM CEO as well as in other documents, like the GAO report that the Mayor obviously did not fully read, the new GM was not obligated to the old contract and the old GM could not afford to honor. So you think the your private business contract with a bankrupt co. entitles you to have the taxpayer pay your pension? When the gov came to the table with the wallet, ALL should have been treated fairly. But surprise, the salaried pension was well funded. Where'd the money go?

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7Freeatlast(1991 comments)posted 1 year, 8 months ago

Sorry but I was there and you guys are wrong .The money went to The PGPB
You should have known that .
I do not work or ever have worked for either company .But one of my companies did some legal work for both .
But I still feel sorry for what Delphi did the the salary workers . But to make enemies of the people who could help is the wrong way to go . If you think that is the best way to go So Be IT
It's your life and income

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8jwhitehawke(87 comments)posted 1 year, 8 months ago

Free brain. I WAS THERE. YOU (personally) did nothing 'legally' involving the spin-off nor the bankruptcy. The union pension fund was all-but empty. The salaried was 86%m solvent. You are obviously uninformed and trying to glorify the union for winning money from the taxpayers..... WRONG. And, it's PBGC. What? You are only a half-educated nitwit.

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9Freeatlast(1991 comments)posted 1 year, 8 months ago

Hopeless
I can see why they went bankrupt.
AND yes I did
Glad you must stoop the name calling to prove my point
Have a nice life full of hate

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10BabaGhanoush(106 comments)posted 1 year, 8 months ago

And now the real truth comes out about the Delphi retireess and who really screwed them over:

http://dailycaller.com/2012/08/07/ema...

Unions Uber Alles!

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11BabaGhanoush(106 comments)posted 1 year, 8 months ago

http://www.tribtoday.com/page/content...

Can't face the truth?

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