After years of frustration and even despair, the 22,000 salaried retirees of Delphi Corp., including 1,500 in the Mahoning Valley, have finally found a reason for optimism.
A report from the Office of the Special Inspector General for the Troubled Asset Relief Program confirms what the retirees have been saying since 2009, namely, that they were sacrificial lambs in General Motors’ bankruptcy process.
The Treasury Department, which was overseeing the bankruptcy, chose not to restore the pensions of the salaried Delphi retirees because they had “no leverage” to delay GM’s bankruptcy, the report states. By contrast, Treasury pushed the company to restore the pensions of United Auto Workers retirees in hopes of pulling the giant auto maker out of bankruptcy within a 40-day period without risking a strike or other delays, according to the Dayton Daily News, which revealed the details of the inspector general’s probe.
The Obama administration was eager to address GM’s financial woes as quickly as possible because it was concerned the company could not survive a prolonged battle. Government financing was at risk if GM was unable to complete its bankruptcy in time.
Not unexpectedly, the inspector general’s report has become a rallying cry for the Delphi retirees, who have waged a four-year battle to be treated fairly.
Their persistence has resulted in legislation being introduced by U.S. Sen. Sherrod Brown, D-Ohio, and U.S. Rep. Tim Ryan of Niles, D-13th, to restore the retirees’ full pensions. Restoration would carry a price tag of about $440 million, which is what the Treasury Department estimated the former Delphi salaried employees lost in the GM bankruptcy process.
As we’ve said in previous editorials, it’s simply a matter of fairness to ensure all retirees are treated equally. The Pension Benefit Guaranty Corp., which took over the plans when GM and Delphi went bankrupt, restored full pensions and benefits to unionized General Motors and Delphi workers, but tossed out a few crumbs to the Delphi salaried retirees.
The upshot of this blatant mistreatment is that many retirees suffered cuts of up to 70 percent of their promised pensions.
A study by Youngstown State University’s Center for Urban and Regional Studies has found that the economic impact of the cuts to the 1,500 Mahoning Valley retirees is about $60 million.
But the good news doesn’t end with the federal inspector general’s report nor with the legislation introduced by Sen. Brown and Rep. Ryan.
Last week, a federal magistrate judge ordered the PBGC to cooperate with the salaried retirees with regard to documents relevant to their lawsuit against the agency.
The delivery of documents must occur on or before Sept. 30, Magistrate Judge Mona Majzoub ruled.
“The court has repeatedly found that the filing of boilerplate objections is tantamount to filing no objections at all,” Majzoub wrote, referring to a string of objections filed by the PBGC to the retirees’ request for 30,000 documents.
But while we remain unstinting in our support of the retirees and their battle for fair treatment, we do not buy the assertion of Rep. Mike Turner, R-Dayton, who requested the inspector general’s report, that the Obama administration “thwarted the bankruptcy process for a politically expedient outcome.”
The fact of the matter was that GM was skating on thin ice and was being squeezed. We in the Mahoning Valley were marking time because GM’s Lordstown plant was in jeopardy.
Today, as result of the federal bailout, the company has not only invested heavily in its Lordstown facility, but has made a commitment for a stable future.