Planet Gore

UAW Bailout: White House Kneecapped White-collar Pensioners

Constructing their UAW bailout a year ago, the White House Auto Task Force ran roughshod — Chicago-style — over secured bondholders’ rights in order to secure a deal for Big Labor. Less well known is that secretaries, engineers, designers, and other salaried men and women were getting kneecapped, as well.

The gutting of white-collar worker pensions at Delphi, GM’s biggest parts supplier, is a teachable moment about UAW power and Obama administration callousness.

As the administration rushed to complete GM’s bankruptcy last May, the question of Delphi was a pressing issue. Spun off by GM in 1999, Delphi was still intimately bound to its former parent through supply chains and union contracts. But when it came time to resolve Delphi pensioners, Delphi’s salaried workers were thrown overboard even as the UAW’s pensions were made whole.

That’s what over $7 million in campaign contributions to Democrats buys you.

When Chrysler bondholders balked at the UAW bailout paying a paltry 29 cents on the dollar, “one of my clients was directly threatened by the White House and in essence compelled to withdraw its opposition to the deal under threat that the full force of the White House press corps would destroy its reputation if it continued to fight,” lawyer Tom Lauria said last May. Take da deal or else.

In the case of Delphi, the administration simply broke salaried pensioners’ legs and left them by the side of the road.

While all Delphi pensions were transferred to the Federal Pension Benefit Guarantee Corp. (PBGC) and slashed by 25-60 percent, UAW contracts were “topped off” by the administration. Though the money technically came from GM, it was ultimately government financed. As a result, some 20,000 salaried workers saw their nest eggs crack while blue-collars were made whole by U.S. taxpayers.

“It was a decision to be discriminatory. It was a commercial decision to pacify the UAW,” says Den Black, a retired engineer and president of Delphi Salaried Retirees Association. The association says workers were denied due process and are taking the case to court this month.

Salaried workers knew none of this at the time, as the White House carved up people’s lives behind closed doors. Indeed, a former Delphi worker, Ken Hollis, says it would have been better if Delphi had gone bankrupt since “the PBGC has placed liens on Delphi’s European assets.” But salaried workers had no idea. The only seats at the table were for Big Labor.

One of those seats belonged to the International Union of Electrical Workers (IUE) who were initially cut out of the deal. But like the UAW, they played their political ace, threatening political consequences in the key swing state of Ohio — a IUE stronghold — unless they too were made whole.

But no one came to the salaries workers’ aid. Why? Simple Democratic politics. For all its talk of being the Party of the Working Man, in fact Democrats are the Party of Special Interests Who Grease Our Palms.

Delphi’s white collars — not the fat cats of media caricature but middle-class engineers and service workers — simply did not give enough money to the party to matter.

Incredibly, they received no political attention at all even as 7,000 Delphi white-collars live in swing state Michigan, for example. Michigan Senators Levin and Stabenow apparently were powerless to provide the most basic constituent service — making sure pensioners were treated fairly. Perhaps these senators were too busy passing out Green stimulus pork to well-heeled battery firms to worry about lifetime Delphi workers losing their retirement greenbacks.

Today, those political representatives are Johnnies-come-lately to the table, trying to make amends for Delphi’s hurting workers, many of whom have seen their retirement plans go up in smoke. Some have even committed suicide. But now they have bipartisan support in Congress. They have damning charts. And they have a day in court. On September 24, they will have a federal hearing in Detroit.

The Office of the Federal Special Inspector General, Neil M. Barofsky, has also agreed to conduct an audit of the administration’s ruthless and unfair tactics and “whether political considerations played a role in favoring hourly over salaried retirees.”

The politics should be clear enough: Big Labor owns this administration. And no one else matters.


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