Delphi on course to dump pensions

[IndianaGreen]

November 18, 2005

Delphi on course to dump pensions

Labor talks stalled; PBGC, GM would safeguard payments

By Ted Evanoff

Bankrupt auto-parts maker Delphi would shift pension obligations for nearly 34,000 workers and retirees to the Pension Benefit Guaranty Corp. under its latest wage offer to the United Auto Workers union.
Delphi, Indiana's No. 3 industrial employer, and its unions have been locked in a dispute over concessions since the company proposed a 61 percent wage cut in October for 24,000 workers, including 6,500 at Anderson and Kokomo.

After UAW leaders slammed the latest wage offer Wednesday, new details about that package emerged Thursday. A Delphi official, in an interview, confirmed the company is prepared to ask a bankruptcy court for permission to turn over the pension plan to federal authorities.

Even if Delphi drops the plan, regular payments to retirees are expected to continue at full levels. General Motors has guaranteed it would cover the portion of Delphi pensions not paid by the government if the supplier went bankrupt before 2007. GM spun off Delphi in 1999.

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The UAW represents 24,000 current Delphi employees and 9,593 retirees across the nation. Among the current employees are 13,979 workers eligible to retire now, according to a report by UAW Local 292 in Kokomo.

GM's pension promise to Delphi covers workers with at least 23 years of Delphi and GM service on the day Delphi terminates the pension plan.

http://www.indystar.com/apps/pbcs.dll/article?AID=/20051118/BUSINESS/511180450

[IndianaGreen]

1. WSWS: Delphi plans to cut 24,000 US auto jobs

The Indianapolis Star reported that the Delphi also plans to dump its pension obligations by turning them over to the government’s severely under-funded Pension Benefit Guaranty Corporation.

Delphi plans to cut 24,000 US auto jobs
By Jerry Isaacs
19 November 2005

The elimination of 24,000 jobs—the equivalent of closing down 12 plants—would devastate communities in Michigan, Ohio, Indiana and western New York, where tens of thousands of Delphi employees and their families live.

Delphi won approval earlier this month from Bankruptcy Judge Drain for enhanced severance packages for its top 21 executives, guaranteeing them millions in compensation if Delphi removes them or they leave. The compensation includes 18 months of salary and 18 months of bonuses, up from 12 months, once the executives sign a document barring them from immediately joining a competitor.

In addition, Delphi is seeking court approval for its “Key Employee Compensation Program,” which provides $87 million in cash incentives to the company’s top 486 executives, including average bonuses of $2.5 million for top four executives, excluding CEO Robert S. Miller. The CEO pocketed a $3.7 million signing bonus when he joined Delphi last July.

Since hiring on as a “turn-around specialist,” Miller has repeatedly complained about overpaid workers, suggesting that many were getting $65 an hour for mowing lawns at Delphi plants. Most recently, Miller said that white-collar workers would be exempted from the drastic reductions in health care benefits being imposed on blue-collar employees.

The Big Three automakers and Wall Street investors are backing Delphi’s attack. GM decided not to intervene to stem the losses at Delphi—which it spun off in 1999—and keep it from declaring bankruptcy. The number one US automaker said it hoped to save billions in reduced costs for parts once Delphi slashed its labor costs.

http://www.wsws.org/articles/2005/nov2005/delp-n19.shtml