By on August 7, 2012

The Daily Caller says it has emails that prove that the pensions of 20,000 salaried retirees at Delphi were terminated “solely because those retirees were not members of labor unions.”

The emails, says the conservative website “contradict sworn testimony, in federal court and before Congress, given by several Obama administration figures. They also indicate that the administration misled lawmakers and the courts about the sequence of events surrounding the termination of those non-union pensions, and that administration figures violated federal law.”

In 1994, GM spun off its parts business into Delphi.  In 2005, the company went Chapter 11.  Later, parts of the business was sold, wound down, or sold back to GM. Says the Daily Caller:

“Twenty thousand of its workers lost nearly their entire pensions when the government bailed out GM. At the same time, Delphi employees who were members of the United Auto Workers union saw their pensions topped off and made whole.”

In sworn testimony, former Treasury official Matthew Feldman and former White House auto czar Ron Bloom, stated that the Pension Benefit Guaranty Corporation (PBGC), and not the administration, “led the effort to terminate the non-union Delphi workers’ pension plan,” the Daily Caller says. “The emails TheDC has obtained show that the Treasury Department, not the independent PBGC, was running the show.”

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29 Comments on “Report: Treasury Behind Delphi Pensions Debacle...”


  • avatar
    DeadWeight

    Lest anyone fret over potential trouble for Timothy Geithner, rest assured that Goldman Sachs & JP Morgan have his back, as he’s the illustrious former President of the New York Branch of the Federal Reserve.

    In other words, he’s an untouchable.

    • 0 avatar
      highdesertcat

      Yup, I agree. Tiny Tim is an untouchable. The only losers here remain the non-union Delphi employees who “lost nearly their entire pensions”. I bet they now wish they had been UAW members.

      That doesn’t mean that the US government did not make it up another way, like with social security or similar funds for them. Whatever aid and pension assistance they could qualify for, maybe even Medicaid.

      But mostly, this bail out thing was all about the UAW and GM being too big to fail. It was selective in nature and of great benefit only to GM corporate and the UAW. “And we’re not done with GM yet…”

      Chrysler also got bailed out, but the administration couldn’t wait to dump its carcass on any automaker who would take it. It only cost the US taxpayers an additional $1.3B to bribe Fiat, but look at the Chrysler subdivision go now! “WOW” is an understatement.

      • 0 avatar
        sunridge place

        I bet you’re glad you worked for the US government. Your pension comes from an organization more bankrupt than GM could ever be. And, no controversy as your check gets cut no matter how broke your generation made this country….kinda cool isn’t it?

  • avatar
    Chicago Dude

    Pretty serious allegations…

    I’d like to see the emails before jumping to any conclusions…

    EDIT – You can read the story at the link. There is no evidence and the article itself seems to contradict the headline.

    Great job, TTAC. This will surely be worth a LOT of ad impressions.

    • 0 avatar
      tresmonos

      It’s tough for the administration to lay blame on the PBGC when they were effectively butted out of the final meetings that covered the decision making process. I’m not sure which part of the emails you didn’t read. Great job, Chicago Dude…. yadda yadda yadda

    • 0 avatar
      Landcrusher

      Sorry Chicago, you got it wrong. The story shows House and the PB guys trying to do the right thing and having treasury, then the WH, interdict themselves into the process.

      I have no doubts that Little Timmy Geithner and the top WH officials won’t have left a trail to themselves, but they are still responsible.

      All these laws on emails ensure that emails aren’t sent by responsible parties anymore. If we allowed them all to delete at will we would actually catch more nefarious activity.

    • 0 avatar
      CJinSD

      The emails are provided, the context is provided, the story is real. This is what journalism looks like, although I understand why it has become unfamiliar during the moratorium on reporting in effect relating to this criminal regime. Anyone who takes the time to read the article and the emails can see what you’ve tried to do here to distract from and dismiss the actions of these cretins. What was your journey like to bring you to a place where you champion monsters?

    • 0 avatar
      PintoFan

      Don’t worry, they suckered me in too. And here I was thinking that I was going to get some real journalism for once. I guess I should have ignored it as soon as I saw “Daily Caller” in the tagline.

  • avatar
    PaulVincent

    But at least no more border agents were murdered.

  • avatar
    Sundowner

    It’s pretty pathetic that TTAC has devolved into positing second hand mudslinging from a partisan propganda source. I guess the site clicks must be declining. It’d be nice if the emails had been proven first and we had an actual smoking gun. “The Truth About Cars”, indeed…

  • avatar
    Conslaw

    I’m an Obama supporter, but I have always thought Tim Geithner to be the weakest link in the Obama administration. Any scandal that gets Geithner to resign, I’m all for.

  • avatar
    Geekcarlover

    On a semi-related story from the bankruptcy/bailout days. It was reported or speculated that there was a link between the political affiliations of the owners of Chrysler and GM dealerships, and who was picked for forced closing. Does any one know what happened to that story?

  • avatar
    dejal1

    Supposedly if McCain had won, Geithner was on McCains short list for Treasury Secratary.

    I wonder what would have happened with a Sec. Geithner in a McCain administration.

  • avatar
    PintoFan

    The article is nonsensical. The author claims that Administration officials leaned on the PBGC to terminate the pensions, yet the emails provided suggest that the Treasury and other staffers purposely isolated the PBGC from political pressure (such as the exclusion from bailout meetings which weren’t actually relevant to the tasks of the PBGC). The very last email cited indicates that the approval by the treasury was just a formality, a “rubber stamp” which was attached to work that was already completed. The author doesn’t even try to support his claim that Delphi employee pensions were reduced because they weren’t UAW members, probably because that evidence doesn’t exist. The entire thing is an exercise in chasing ghosts and cynical conspiracy mongering.

    I give you credit for at least referring to The Daily Caller as a “conservative website,” and not egregiously mislabeling it like you did with ZeroHedge (a “finance blog”) or the Heritage Foundation (a “think tank”).

  • avatar
    Pch101

    Y’all could have saved yourselves a lot of drama had you just read the GAO report.
    _______________

    The benefits provided by PBGC must comply with the limits on guaranteed benefits under ERISA, and as a result, the amount guaranteed and paid by PBGC to some Delphi retirees will be less than the amounts promised by Delphi. ***However, some Delphi hourly plan participants avoided these reductions because they were transferred into GM’s plan prior to PBGC’s termination of the Delphi plan.*** Some of the other hourly plan participants who will receive less from PBGC than the amount promised by Delphi will have their losses covered by GM because of top-up agreements originally negotiated when Delphi was spun off from GM. *** These participants will receive additional payments from GM resulting in their receiving, in total, their full promised benefits. But most Delphi employees are not covered by these top-up agreements— including about 40 percent of the participants in the hourly plan, and all the participants in the salaried and other four smaller plans. ***PBGC’s data showed that, as a result of the ERISA limits, PBGC has had to reduce benefits for just under half of salaried and hourly plan participants already retired and receiving pension payments, according to information collected by DSRA.***

    http://www.gao.gov/products/GAO-12-168

    • 0 avatar
      Landcrusher

      Just reading that, never mind looking for it, saved no time and contradicts nothing.

      • 0 avatar
        Pch101

        “Just reading that, never mind looking for it, saved no time and contradicts nothing.”

        Given your penchant for not allowing facts to interfere with your arguments, your reaction isn’t surprising.

        But try to read it again. Here’s a summary, in case you missed it:

        -A lot of the hourly workers had their pensions under the GM umbrella or were subject to top-up agreements that pre-existed the Delphi bankruptcy. The salaried workers did not.

        -Many of the salaried pensions were subject to ERISA caps that allow for less benefit than what had been provided by Delphi. Uncle Sam is not is generous at the original provider.

        Treasury didn’t have anything to do with either of those things. You’re eagerly looking for a conspiracy where there isn’t one.

      • 0 avatar
        Landcrusher

        Uninteresting, and besides the point. The point is not about who was responsible for the pensions. The story is about whether Treasury and/or the Administration inserted themselves into the decision making process in a partisan manner when they were not supposed to be involved at all.

        This is analogous to partisan interjection into the IRS dealings with individuals.

        Others tried and failed to call the charges false and unsupported, and now you want to drive it into the weeds and show the right outcome was found..

        It sounds to me like a bunch of partisan lawyers and bureaucrats stuck their noses in and came up with a technically justifiable solution which isn’t fair from any point of view other than one held by union thugs. Given the state of our legal system, any smart SOB can now use the law to cheat people if he has the balls and power. They keep this crap up and it will end like it always does.

      • 0 avatar
        Pch101

        “Uninteresting”

        Of course. Facts that contradict your assumptions don’t make you very happy and are therefore uninteresting for you.

        One more time: The hourly workers were treated differently because they cut their own separate deals with GM prior to the Delphi bankruptcy. That had nothing to do with Treasury. Sorry to disappoint you.

      • 0 avatar
        Landcrusher

        Except I made no assumptions to contradict and you are continuing with your straw man argument.

        The process to determine a fair outcome was interfered with. Once that happens, arguing the outcome is fair may be interesting to you, but I no longer find such things interesting at all. The point of the article is the partisan interference. It happened. It’s more evidence of this Administration”s insistence on breaking any rule they want while making more and more and more rules for the rest of us.

        You can attack my argument, or continue to throw out more irrelevant stuff. I am assuming you will try to say how this is not important, but that’s not a contradiction. I”m done.

  • avatar
    jimmyy

    Of course this story is true. The same administration launched Toyota recall attacks. Never again will a Detroit product ever be in my driveway.

  • avatar
    oldyak

    This will only end when G.M is dismantled!
    and when I see Harold Ford Jr.,who is now a executive at a major brokerage firm..and who comes from the most corrupt family of politicians Tennessee has ever seen ,being sucked up to by veteran CNBC anchors as the new messiah..Its all but over!
    Lock and load…
    Quoting John Lennon:
    “you say you want a revolution”

  • avatar
    doctor olds

    Delphi was a separate company from GM for 9 years before they (Delphi) filed for bankruptcy protection in ’05. The only connection with GM when they were forced into bankruptcy by the financial crisis of ’08 was the “top off” provision in the UAW contract. It is reasonable that Delphi Salaried retirees were handled in a manner consistent with typical bankruptcy proceedings.

    There is no doubt that the Obama administration worked hard to serve the UAW interests. They rationalized that it would be too hard to deal with the UAW and take too long to negotiate new contracts. There is validity to the argument in that time was of the essence in GM’s bankruptcy to avoid a true death spiral.

    As a GM Salaried retiree, I was certainly pleased that new GM was allowed to continue funding our pension program. The rationalization for that apparently unusual action in GM’s own bankruptcy is that dumping all GM salaried retirees on the PBGC would bankrupt that corporation, which in turn is backed up by the U.S. Treasury. Better to get the money from a new GM than from taxpayers, was the argument.

    The Obama Auto Task Force did keep UAW retirees whole- their retirement health care was already funded by the VEBA a product of the break through 2007 UAW contract- while demanding that Salaried retiree benefits, which had already been frozen in 2006, be slashed another 2/3.

  • avatar
    rnc

    My understanding is that part of the spin-off (really a way for GM to get away from it’s integrated model which had become unsustainable), that since a majority the UAW workers had been GM workers for so long, GM was in regards responsible for thier pensions (whatever was done for GM’s UAW employees during BK would have to be done for Delphi’s UAW employees. The management on the other hand, they became delphi employees and delphi was soley responsible for them.

  • avatar
    vaujot

    I know Matt Feldman. When he says in sworn testimony that the PBGC led this, I believe him. And so should you.


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