Delphi's UAW retirees could be OK after their pensions are transferred to the federal government -- but for many salaried retirees, the change could be a disaster, officials said Thursday.
Salaried retirees who were getting extra retirement pay in return for retiring early may lose big as a result of the change, said Den Black, interim chairman of the Delphi Salaried Retiree Association. Salaried retirees lost all of their health benefits April 1, so for many, the latest news could be a double whammy, he said.
Is Lorain County's' past a prologue for Erie County's Delphi retirees? Westerhold wonders.
Meanwhile, United Auto Workers officials have assured members their pensions will be safe, said James Harrington, president of the retiree chapter of UAW Local 913 in Erie County. Health benefits for UAW retirees have largely remained intact, although they were cut recently. Long term, much of the union's health benefits will be backed by stock from the new version of GM.
On Wednesday, the federal government's Pension Benefit Guaranty Corp. announced it will take responsibility for 70,000 Delphi pensions, including 47,000 for hourly workers and about 20,000 for salaried retirees. The federal corporation is taking over the pensions from bankrupt General Motors.
Harrington said UAW officials assured him Thursday that GM will make up for any shortfalls in what's provided by the federal corporation, ensuring that pensions for UAW retirees will remain intact.
"That was relayed to me through sources in the UAW," Harrington said. "Our people are not going to be disadvantaged."
GM issued a statement confirming it is keeping its promises to the union.
It said it was giving $70 million to the federal corporation and would also provide proceeds from the sale of Delphi assets.
"GM has met and continues to meet its obligations toward the Delphi pensions," the statement said.
The UAW media office in Detroit did not return a call Friday asking for comment.
Harrington said salaried retirees "are very disadvantaged," however. "They don't have the contract we have," he said.
Black said the loss of health benefits on April 1 meant salaried retirees now have to pay $1,300 to $1,500 a month if they want to keep health care comparable to what used to cost them about $100 a month.
Many Delphi salaried employees who essentially were forced to retire early are getting 30 to 40 percent of their income from an early retirement supplement. They stand to lose that supplement when their pensions are taken over by the federal corporation, which typically does not pay early retirement supplements, Black said.
Black spoke to the Register on his cell phone as he visited the U.S. Capitol, preparing to visit the office of House Speaker Nancy Pelosi.
He said 50 members of Congress, including U.S. Rep. Marcy Kaptur, D-Toledo, have signed letters protesting the unequal treatment being given to salaried retirees and Delphi retirees who worked under a contract with another union, the International Union of Electrical Workers. Non-UAW union retirees from Delphi also face losing their health care benefits.
The auto industry received a huge bailout from taxpayers, and it is "outrageous" and "unjust" that many Dephi retirees are being treated differently than UAW retirees, Black said.