Mr Geithner has decided that Delphi Salaried employees/retirees are not as important as the UAW members of Delphi.
As he swept in to "save" GM and expedite it's emergence from bankruptcy, he has forced all of Dephi's pensions to the PBGC which will provide 30-50% of the original pension promised Delphi's employees. But not to worry, he will be providing GM with Federal funds to "top-up" the pensions of... Wait... JUST the UAW hourly members of Delphi. The salaried employees are being left under-funded.
So every tax payer out there has effectively decided that they want to support the UAW and not those that work in the salaried ranks. Keep in mind that we are not talking about the Delphi execs. The execs have their own safety nets and "equalization" programs to take care of them. These are the secretaries, engineers, line supervisors, planners that have worked alongside the UAW for all these years. And most of these years have been as GM employees before being spun off to Delphi.
Ah, but the UAW negotiated a stopgap with GM when Delphi was spun off to protect their pension. But didn't that go away with all the other obligations that GM had when they entered bankruptcy? Of course it did. It went the same way that the dealer contracts went that allowed GM to close them down willy-nilly. It had no more meaning in bankruptcy than the liabilities that GM walked away from for any defective products that they previously sold.
Perhaps the PBGC will fully fund the Delphi salaried employees pensions with the lien that they rightfully placed on Delphi's foreign assets. After all, how much of the pension funds were skimmed to purchase these foreign operations when the pension pots were brimming due to the robust stock market of the 80's and 90's. (By the way, Delphi's foreign assets were conveniently not included in Delphi's bankruptcy proceedings.) No such luck here either. The PBGC removed their liens on Delphi's foreign assets at the prompting of... Mr Geithner, of course. It was in the way of him setting a speed record for getting GM out of bankruptcy. We can't have that.
But I said "poverty" in the title. Isn't that a bit extreme? Did I mention that the Delphi salaried retirees have also just lost their medical and life insurance benefits? Did I mention that many recent retirees have lost their severence pay? I know, I know, not everyone out there had these to begin with. But is it fair to pull the rugs out of individuals that tried to do the best they could for themselves and their familes?
Could politics be at work here? Hmmm, the UAW has always been a strong supporter of the Democratic party. The salaried workforce are an unknown political entity. Perhaps no fewer of them vote Democratic, but they are an unknown entity. They don't have the strong political association (and lobby) that the UAW has with the Democratic party.
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