Some animals are more equal than others.
Welcome to the General Motors bailout, part three—or is it four, or five? It’s hard to keep up, but this week the federal Pension Benefit Guaranty Corporation took over the pension liabilities of Delphi, the auto-parts spinoff of GM that has been working its way through Chapter 11 since 2005. As with the previous taxpayer rescues, this one includes a special favor for the United Auto Workers.
Under the agreement, the PBGC will assume some $6.2 billion in pension liabilities from Delphi, including both hourly and salaried employees. That’s the second biggest pension bailout in PBGC history, and it takes billions of liabilities off the books for GM. As Delphi’s former parent, GM had agreed to take responsibility for billions of dollars of Delphi’s pension obligations to its hourly employees.
It will be months before Delphi employees know what percentage of their expected pension they’ll receive, but not all pensioners are created equal in this arrangement. UAW employees will have their pensions made whole by GM, which insists it is merely fulfilling its end of a deal made with the UAW in 1999 (when it spun off Delphi) to cover any future pension shortfall. Few such obligations usually survive bankruptcy, but, nah, we’re sure politics had nothing to do with it. Less fortunate are smaller unions and Delphi’s salaried employees, whose pensions may see drastic reductions and who already lost their health care and life insurance plans on April 1. They would seem to lack the UAW’s clout inside GM and the Obama Administration.
In a letter to the House Financial Services and Senate Banking committees, Michigan Democrats Bart Stupak and Dale Kildee and Republicans John Boehner and James Sensenbrenner, among others, have asked for Congressional hearings on the disparity. Pension benefits, the letter warned, “could be cut by as much as 70%, if not eliminated entirely, for 15,000 retirees.â€
If you are in a union and it donated heavily to the Obama campaign and/or other Democratic candidates, you’re good to go with tax payer funding.
If not, well, hope you don’t mind working a while longer to contribute taxes to the fund that will pay off the GM’s obligations to the UAW.
Life ain’t supposed to be fair. But playing The Gimp to your co-worker’s Maynard and Zed is just wrong.
Found via SayAnything