Report: Obama sparked GM bankruptcy

Pension moves for Delphi workers challenged
Associated Press
Aug 17, 2013

A government inspector general says President Barack Obama's administration played a key role in the General Motors bankruptcy in 2009 as pensions were cut for salaried Delphi Corp. retirees but not unionized workers and retirees of the supplier.

The report issued Thursday stopped short of saying the administration's role was right or wrong. It made no recommendations.

About 20,000 Delphi salaried retirees — almost half in Ohio — saw their pensions cut by as much as 70 percent during GM's bankruptcy.

The report says administration officials indicated they acted quickly to avoid GM's failure.

The Treasury Department, which oversaw the president's auto task force, took issue with the IG report. Assistant Treasury Secretary Timothy Massad said the pension decision was made by GM and was "driven by sound commercial reasons."

Den Black with the Delphi Salaried Retirees Association said the report made clear something salaried retirees had long suspected. "The administration and the Treasury and the Auto Task Force were clearly the drivers relative to the decisions made as the 40-day GM bankruptcy played out," he said.

 

Comments

kURTje

THREE 2 one!

Licorice Schtick

Blame Obama for GM bankruptcy? What a novel and twisted idea!

GM's bankruptcy was inevitable, and if any POTUS was responsible, it was Dubya.

GM was at risk for having its assets liquidated. While it could be argued that there would be no injustice in that, there were better arguments for saving the company. GM is so important to U.S. interests the the the administration would have been derelict by NOT being involved in the reorganization.

Involvement in reorganization does not equal causing the bankruptcy. This story is just trolling for partisan attacks on Obama.

Contango

The GM & Chrysler bankruptcies as orchestrated by the Obama Admin., turned decades of bankruptcy law on it's head and effectively nationalized (see: fascism) them for the benefit of the Democrat Party's union constituency.

The govt. STILL owns over 70% of the old GMAC (now Ally Bank).

VP Biden 2012: "bin Laden is dead and Detroit is alive!"

Reality 2013: "al-Qaeda is alive and Detroit is bankrupt."

http://en.wikipedia.org/wiki/All...

There you go again

Why did it take so-o-o long for this information to come out about Obama and his cronies? Boy, are they good at coverup, coverup, coverup.

Pete

Obie The Clueless & his merry band of incompetents screwed 20,000 people. Par for the course with him.

The Big Dog's back

That's the risk you take being salary. Should have joined the union.

Contango

Re: "Should have joined the union."

Thousands of union workers also lost their jobs, putz.

grumpy

Investors are pulling out of municipal bonds, mainly because of the change in how bancruptcy laws were done with GM and Chrysler. Not just Muni bonds but all bonds are being re-evaluated both by individuals and mutual funds. Some folks just don't wish to take the chance on bonds anymore since the changes in what happens during a bancrurptcy ala GM. Detroit just got screwed by the UAW and how the federal gov't changed the precedent.

http://www.thefiscaltimes.com/Co...

It goes in to note, “The City is authorized and required by law to levy and collect…property taxes without limitation” to pay off bondholders. That should mean that the city’s resources are first and foremost owed to investors who have funded the city’s operations. However, in trying to put the city back in working order, the authorities have decided to demote bondholders to “unsecured creditor” status, along with retirees and many others.

--------------------------------------------------------------------------

Muni bond holders are running away from investing in cities, thanks to what the federal gov't, the UAW, GM, and Chrysler, did to change precedent in the auto bancruptcis.

Now the cities get to face the consiquences of the federal gov't and the UAW.

Contango

Re: "Investors are pulling out of municipal bonds,"

It pushes up the borrowing costs for municipalities which ultimately affects their taxpayers and their quality of services.

I watch the flow of funds weekly:

http://www.ici.org/research/stat...

44846GWP

Get a JOB and you wouldn't have time to "watch the flow of funds" all the time.

pptrsha

DONT BELEIVE UNION DIDNT GET HURT

Webster

Typical union political hack rant.

deertracker

It's obvious some of you only read the headline!

Contango

Re: "It's obvious,"

And you ‘may’ want to try reading business news once in awhile.

You may have learned that there's a confrontation between FIAT and the Chrysler VEBA that owns part of the company regarding the buy-out price.

http://www.bloomberg.com/news/20...

AJ Oliver

The real "news" is that the One % have been permitted by the govt (both R & D) to loot pension funds, which they have done frequently. At one time, the pension systems of big companies were fully funded - but that money was STOLEN. They are out to destroy the middle & working classes.

Contango

Re: "At one time, the pension systems of big companies were fully funded - but that money was STOLEN."

BS.

You're obviously unfamiliar with ERISA.

The REAL unfunded liabilities are in the public sector health and welfare retirement area.

IL for one is a basket case. Detroit is another.

http://www.chicagobusiness.com/a...

pptrsha

We only get 1/4 retirement we were going to get before the bankruptcy. we lost medical, dental ,and vision. after house payment and utilities its either food OR medical. don't try and tell us hourly didn't get hurt.

looking around

pptrsha ??? I was a union worker for GM for 32 years, the PBGC guarantee trust took over my pension for 30 of the years of service using the same multiplier rate for each year of service as negotiated by the UAW in contract during my working years. GM provided a make up payment monthly to cover the difference of the monthly payment without social security until I reached age 62. The GM make up was then dropped and my pension benefit was recalculated. GM then by contract began paying for the additional years of service past the 30 year mark. The combination of social security, PBGC and the reduced benefit paid by GM is exactly what I was to receive. With ongoing negotiations between the UAW and Company things change from time to time. I pay part of my medical insurance premium based on my requirements and I've picked up my own dental and vision coverages, the UAW who has taken over these benefits has provided me with a bare bones coverage for dental, I elected to pay for additional coverage. I have continually challenged both Union and Salaried retirees whom claim the were short changed to show me on paper by contract where they were shorted and have to date had no takers. I feel what was done to protect the earned pensions and benefits of workers both salaried and hourly union was correct and I am glad I had a union to speak for me and thousands of UAW retired and working people during and since this bankruptcy reorganization.

Incidentally, This is why the PBGC pension benefits guarantee corporation insurance plan was put into place to protect the defined pension benefits earned by employees put at risk by company's dissolving.

What I don't like is how these pension funds have been raided for years and these company's using bankruptcy have shed their responsibility passing the responsibility to the PBGC. As they recover I feel that they once again should share in the financial responsibility of those benefits based on profits.

4shizzle

"A government inspector general says ...."

...............Sounds like more anonymous Republican undermining = lies.
Let's wait for the truth.

Pete

SIGTARP was appointed by Obie, confirmed by Prince Harry's Senate.

Pretty bad when the parasite class blames Republicans for what is 100% their doing.

samiam

And the government raided the social security "pension" funds too. It wasn't just some of the corporate folks that did it. So Congress calling the corporate folks greedy is the pot calling the kettle black.

Contango

Re: "And the government raided the social security 'pension' funds too."

See LBJ's 1970 unified federal budget.

http://www.ssa.gov/history/Budge...

SamAdams

While government regulations, etc. may have contributed to GM's bankruptcy — and, in the case of Obama's "fix" may have exacerbated some problems — the real blame for the GM's problems lie within GM. Was GM's product substandard or overpriced (or both)? Did management get too greedy? Did unions (not the rank and file membership, the leadership) get too greedy? Was management cowed enough to fall in line with unreasonable union demands against better business sense?

While I believe all of these things played a real role, the one thing that SHOULDN'T have played a role was the federal government. Companies, even BIG companies, go bankrupt all the time. They rarely go out of business, but instead reorganize (look at the airlines, for example, though that's not the best example at the moment since the government is interfering with THAT industry right now, and in a big way). Government meddling only ensured that, while GM survived (for the moment), it may still suffer from whatever it was causing so much trouble for the company in the first place.

Unfortunately, it's the workers who suffer instead of either government hotshots or corporate bigwigs. And I include salaried employees here as "workers!" After all, just because SOME people went to college, or SOME people had skills others lacked, is no reason to punish them for it! What is it today anyway with the inclination to want anybody who does well to suffer?

NOBODY is "too big to fail." There are plenty of others in the wings waiting to pick up the pieces of others' mistakes. Either learn from those mistakes, or don't, but reap the consequences of your choice.

I would note that, though I don't know it's specifically the case with GM, it IS the case in some states (most notably Indiana, as I recall) where inflated pension deals (thanks to unions, of course) are quite literally ensuring that EVERYbody loses... I certainly don't begrudge a pension to the man or woman who's earned it. But don't cry to me about retiring at 50 and then having to wait 'til Social Security kicks in! Wanna cry about the much-maligned 1%? Institute means testing for Social Security! Yes, it's another "success" tax, and no, it's NOT fair. But some are determined to penalize success anyway, and it least THIS penalty would effectively go to those who needed it instead of those who THOUGHT of it!

The Hero Zone's picture
The Hero Zone

I propose we break up the failing, quagmired, monopolistic Federal government into "baby-feds". Hmmm, no, that's not a catchy name. What would we call a series of smaller governments more capable of addressing the needs and concerns of its population, geography, and other unique circumstances? States?

Hmmm. "States". Yeah, I like the sound of that. Let's make a bunch of "states" to handle the burden currently imposed heavily on our Federal government. I think that these "states" would do an excellent job picking up the pieces just as you said!

Stop It

Abraham Lincoln took away State's rights way long ago, HZ. Good luck on gettin' 'em back.

SamAdams

Hero, what an AWESOME idea! Too bad nobody thought of it in 1778, and too bad you're one of the few who think of it NOW!

There are several organizations that focus on the restoration of the Tenth Amendment. There's also currently the beginnings of a movement to use the Constitution itself to restore the Constitution and force the federal government to follow the law; that movement is based largely on states taking back their lawful responsibilities.

While most of us can't do much to change things at the federal level, most of us CAN have an effect on things at the STATE level. Maybe if we as voters and activists took our OWN responsibilities seriously, we could actually do something to strip the federal government of the responsibilities it's STOLEN or coerced over the last 200+ years!

And yes, it WAS Abraham Lincoln that represented the beginning of SERIOUS usurpation of states' rights. Are history revisionists still preaching in schools that the Civil War was about slavery? Or have they decided to tell the truth and discuss states' rights, both in context and in the implications for the future?

Contango

Re: "SERIOUS usurpation of states' rights."

See also the 16th Amend. which first allowed the direct taxation of state citizens by the national govt.

“The power to tax is the power to destroy,” - John Marshall

4shizzle

“The power to tax is the power to destroy,” - John Marshall

.........................nonsense.

1 Corinthians 9:7
New International Version (NIV)

7 Who serves as a soldier at his own expense?

Do you think our Armed Forces buy bombs, bullets, tanks, F-16s , destroyers, with their own money ie. each troop pulls money out his own pocket- to protect your sorry ass- ?

SamAdams

There's more than enough money to pay for national defense without an income tax. It's all the entitlement nonsense that's been added over the decades that's caused the problem, and continues to make it worse. Only a politician would think it'd be okay to add still MORE entitlements! But what the heck, they can always raise taxes AGAIN, right?

Want PROOF the power to tax is the power to destoy? Wait another couple of years. If there's not a DRAMATIC turnaround and soon, that's exactly what's going to be happening.

4shizzle

There's more than enough money to pay for national defense without an income tax.
.................And where , pray tell , is that money coming from ?