Automotive News [sub] reports that GM spin-off supplier Delphi has received approval from bankruptcy court to cut benefits to 15k non-union retirees. The ruling will save Delphi an estimated $70M per year, improving the chances Delphi will end its nearly 3.5-year sojourn in Chapter 11 restructuring. GM has been helping generously towards that end, having offered to buy Delphi’s steering component business for an undisclosed sum and funneled hundreds of millions to its crucial supplier. Or quasi-independent division. Or whatever Delphi really is to GM. The full text of the order in question is here (pdf). It’s long, so check out a few highlights after the jump.
“The Debtors are hereby authorized, but not directed, to freeze the Delphi Hourly-Rate Employees Pension Plan (the “Hourly Plan”), in whole or in part, effective as soon as practicable following receipt of consent from the applicable Unions,” it begins. Interestingly, one of Delphi’s first-day filings (pdf) asked their judge “to consider rejection of the collective bargaining agreements with those Unions with which the Debtors do not have ratified, signed cost-reduction agreements, and to consider elimination of their retiree medical and life insurance benefits.” Oh, yeah, “on an expedited basis,” too. Consent, as they say, is sexy. And the unions weren’t giving it up cheap.
The salaried chumps, on the other hand, didn’t have Ron Gettlfinger and company manning the ramparts for them. “The Debtors are hereby authorized, but not directed,” wrote the Judge Drain way back in September, “to freeze the Delphi Retirement Program for Salaried Employees, the Delphi Mechatronic Systems 3 Retirement Program, the ASEC Manufacturing Retirement Program, and the Packard-Hughes Interconnect Non-Bargaining Retirement Plan.” These were replaced with what amounts to a 401k, except for executives who get the appropriately acronymed SERPS program.
The Retiree Committee brief sought to “explore the efficacy of preserving applicable federal tax credits available for retirees in connection with the debtors’ implementation of the Court’s authorization to modify retiree benefits, and to consider appropriate modifications to the Court’s order in return for waiving, as the representatives of all retirees, appellate rights with respect to the Benefits Order.” Whether these benefits were “vested” seems to have been an issue.
Excellent!
Now, if they could just do something about the thousands of retired UAW leeches still sucking life from the corporate body Delphi would have a slim chance for survival.
Excellent!
Now, if they could just do something about the thousands of retired UAW leeches still sucking life from the corporate body Delphi would have a slim chance for survival.
You know, every salaried GM employee just saw their retirement future flash before their eyes…
If it can (and did) happen to Delphi – it sure can – and will happen to them too.
They worked hard for many years to earn their retirement benefits. They are not leeches.
What’s the executive suite doing to earn their bankruptcy-proof pensions? Running the company straight into the ground, collecting bonuses all the way!
George Keller :
March 12th, 2009 at 2:26 pm
Excellent!
Now, if they could just do something about the thousands of retired UAW leeches still sucking life from the corporate body Delphi would have a slim chance for survival.
My brother-in-law is an engineer with Delphi, a non-UAW employee, who just saw his retirement stolen from him by a mangement system that has ruined the company for which he has worked all of his adult life (20+ years). not excellent at all. He could have worked elsewhere, but based on the whole package including retirement benefits, he chose GM. This is no different than hiring somebody at a salary of $20 per hour then when it comes time to pay them giving them $15 per hour because you didn’t know how to run your business. NOT EXCELLENT at all.
approval from bankruptcy court to cut benefits to 15k non-union retirees.
Isn’t that going to be a giant marketing coup for the UAW to get people to sign up … “The non-union guys got screwed, we won’t let that happen to our brothers”.
Edward
Please give us some more detail. It isn’t that simple. Were future earned benefits cut? Were retiree health benefits cut? What’s the truth.
I’ve been there in another industry, what was really changed?
As sad as this is, it’s necessary for Delphi to have any chance at all. GM will have the same issue, magnified 10 or 20 fold, if it survives at all after being reorganized. Get your earplugs ready for the screaming.
In my view, anyone who depends on an employer provided defined benefit plan should be demanding that they convert the assets to some sort of annuity and switch to a defined contribution plan (ala 401k) immediately. There are no guarantees, but at least you have no false sense of security if you can count your own shekels.
Also, IMO any BOD not moving to convert a pension plan to a defined contribution plan should be removed by the shareholders for shirking their fiduciary responsibilities. Nobody knows what the future holds, and saddling any management with an albatross like pension obligations limits their ability to manage the company in the best interests of the shareholders.
Today’s ruling confirmed an earlier ruling which had been appealed by the retirees. According to the DetNews, the ruling allows Delphi to “end health and life insurance benefits for 15,000 salaried Delphi retirees and their spouses on April 1.”
Sorry Juniper, there’s no easily-extracted “truth” here. Check out the Delphi Salaried Employees site and delphidocket.com for the gory details. The retiree motion is here.
@George Keller I got my ass into work every day for 36 years.I paid my taxes,put my kids through school,donated to charities with both time and money.I bought lots of consumer goods and never asked for a hand out from any body.
If thats your idea of a leach you got some pretty
[edited] values.
I don’t think leaching is a sin but I’m not too sure about envy.
mikey, you are not a leach. On the other hand, you (as in your benefits) are sadly an easy target.
They do this, rather than improve efficiency of current workers. If they would work to get current worker productivity up, to US based Toyota levels, the difference in cost wouldn’t matter that much.
The problem is that Toyota’s workers are more productive, and the first rule on that is blame management for under-productive employees. (Management is responsible for putting policies in place that promote good productivity)
“@George Keller I got my ass into work every day for 36 years.I paid my taxes,put my kids through school,donated to charities with both time and money.I bought lots of consumer goods and never asked for a hand out from any body.
If thats your idea of a leach you got some pretty
fucked up values.”
Plenty of other people worked just as hard as you did and got absolutely nothing in the way of retirement benefits. Are they any less deserving of these benefits than you are? Please reconsider your accusation of him having “fucked up values”.
I, for one, am very angry that this Delphi ruling applies only to non-UAW workers. If there is any justice in this world, it would apply to ALL retirees – not just the non-union workers.
Thank you Eitan. A couple of facts here GM Oshawa has the hightest productivity[man hours per car in North America]At least thats what GM management tells us.
When you hear these figures thrown around,$50-60-70 an hour,its based on total compensation,hourly rate benifits and pension contributions.
So now people are saying”srew em why should these guys get a pension”
Well how about this EXCELLANT idea!Give me all the dough that GM has paid out of my hourly rate calculate a little interest,give it all back a and I will slither away like a leech should.
So wait let me get this straight,kowsnofskia.I spent 36 years working for the pension that was promised me from day one.Now I gott’a feel guilty cause some poor bastard worked his whole life for SFA?Cause the salary guys sneered and looked down thier noses at the low life hourly fucks.NO! they said we don’t need no f—ing union.Mother GM will always look after us.
Sympathy?Yeah I got lots of it.Guilt? not a fucken shred!
It is still unclear if just the medical/dental/optical/life Insurance benefits were cut or the monthy pension check was cut or even eliminated.
I’ve heard that benefits can be cut but not the pension. True or false?
Health and life insurance benefits.
We could definitely use some more clarity here. I don’t mean to be hysterical, but if someone works for their entire adult life for a company, and their pension is just discontinued, that is seriously f_ed up. I mean seriously. It’s not quite as bad as going out and shooting people, but it’s not that far off.
People only have one life, and they put it into this company. These people were responsible enough to prepare for their old age by working at a place with a retirement plan. What are they supposed to do now? They can’t just get younger and go back to work.
I agree that these pensions were all pyramid schemes, bound to fail, but the whole 401(k) thing is a trap too. Cheney & Co. incentivized you to invest your retirement in the market so that they could make off with it. And they did. And that will continue.
Retirement money should be in safe accounts, earning interest. It should not be “leveraged” or deferred. I don’t know why people in our country can’t understand that.
Thank God some of the people here have the guts to say what we are all thinking. Once a person can no longer contribute to society, he or she needs to be culled from the herd.
I am a little bummed that it is just the leeches who worked in industry that have been mentioned here, for the problem is far more widespread than just those hourly losers who expect their companies to pay off their pensions just because they said they would. With our present losses in the stock market, I think we need to look at those who had 401k’s, for they are going to be leeching off the rest of us soon, also.
Here is my modest proposal: every year after a person retires, an audit is done to see if the retiree can pay for his or her own welfare. If the retiree cannot, then a friend or family member has to sign a contract that assures that the financial needs of the retiree will be covered for that year. If no one comes forward to assure that society will not be burdened with another leech, then the indigent retiree will have to be put down.
Let’s face it, if we simply kill those people who no longer contribute to society, there will be far more left over for the rest of us. Statistically, it is the last six months of life that chews up most all of the healthcare costs that a person will have, so by ending life before illnesses and chronic problems occur, we can cut a huge chunk out of our healthcare system. To me, this is a win-win.
There are many other benefits, also. Holidays will be far less hectic since we will no longer have to travel all over the country to placate our aged parents. There will not be those irksome walkers in the malls. The left lanes on highways will no longer be blocked by blue-haired octogenarians. And we will not need as many handicapped parking spaces, making all of our lives easier.
I know that there will be some whiny liberals and Christians who will claim that we have an obligation to care for those who are aged or infirm, but Swift and I know better. Once we steel ourselves to what needs to be done, and we dispatch those who would leech off of us and the poor industrialists, then we will enter into an era of Randian perfection.
Post updated with more details. Seriously though, sorting through all the court documents is a seriously Augean task.
We now return you to your Swiftian riffing.
Delphi was bleeding cash, so it went before Judge Drain, and now salaried retirees are running on empty.
Thank goodness Social Security and Medicare are in great shape far into the future. Oh, wait …
Imag, why does “everything” to liberals have to come down to Bush & Cheney? I’m just askin’. I had a customer who blabbed for 1/2 hour wasting my time yesterday, ranting about Bush & Co. – he was obviously some kind of ex-hippie probably still on damn drugs. Get a life; “you’ve got your guy” and he’s doing a BANG UP JOB – why, the stock market is only down 25% in 8 weeks, eh? And YOUR 401k, too, eh? You got what you voted for; stop whining. Told my wife on the way home yesterday that “Whining” has become the new American anthem. Sadly.
Looking at history, it sure seems to me that whenever the people got the short end of the stick, it was Demoncrats AND Repugnicans in power in some way or the other; there doesn’t seem to be a lot of difference as to whether the thief disguised as a politician robs you with the gun in his/her/its left hand or right.
BTW I’m no ‘conservative’ in the sense that in no way would I like to ‘conserve’ the status quo.
I’m actually a radical. You know, someone who actually wants to put the country back onto a Constitutional footing. Used to be that would have been considered ‘normal’ but since one day over the last 40 or so years I must have accidentally awakened on Planet Bizarro, where right is wrong, up is down, black is white, etc., I’m now considered ‘radical’. Along with Constitutionalists, Libertarians, Ron Paulists, etc. etc.
As for these folks losing their benefits, it’s bad. Just as bad as when it happened to UAW and non-UAW alike back in 1963 with Studebaker. Which is why it took about 8 years for the Federal Government to pass laws “ensuring it would never happen again”. But over the decades, the powers that be watered these laws down. And so we’re obviously back to square one.
Here’s a novel idea; the government could tax consumption not income (like the US Constitution actually originally allowed for); folks could be actually responsible for saving for retirement on their own by being paid a living wage in the first place (and taught self-control); folks who cannot/will not exercise self control would be at the mercy of private (often Christian or Jewish) charity at the end of their lives. Yeah, sounds rough, eh? Think again; How much less rough than a MASSIVE percentage of the world’s population is it, who get NOTHING for retirement benefits and make too little to save for retirement? Kind of hard to save for retirement when you make the equivalent of $1 a day or whatever, eh?
Last time I checked, Imag, by the way, 401k retirements were not “forced” onto people. You don’t have to take them up, nor any monies offered in matching funds from your employer if you are lucky enough to be offered any. However, the communists in the People’s Republic of Massachusetts ARE mandating the purchase of health insurance whether you can afford it or not, apparently; and if you don’t bother, they “buy it for you” by fining you (at higher costs). Yeah, that’s the United States I grew up in! NOT.
Ruckover, well done man. Well done.
The problem is, there was a contract between the employer and the employee. The employee met the standards of the contract so the employer should be held to pay the employee per the contract.
Heres the thing I see. The contract said “we’ll give you xxx for the rest of your life”. What they SHOULD have done was say we’ll give you xxx per year for y years”. the employer gambled that retired employees would not use all of xxx and not live as long as they do for the y years. They are losing that gamble.
I believe the contracts are far too much in favor of the UAW and other unions, but that is the contract the Employer agreed to and now must fullfill. Anything else is breach of contract.
@ ruckover:
Are you serious? This reads like a Hitler manifesto from the 1920s. Forced euthanasia of the retired non-productive, is that your cant?
As for expecting a company to pay out its contracted pension obligations, why not? The US prides itself on being a country of laws, and an employment contract should be no different from any other.
Company I worked for put their contributions and the employees ones into an account administered by a third party. No sticky finger dipping by management when times got a bit tough. The way I see things, I paid for that pension with my money, and I had a contract. It was part of my compensation. Why the fuck wouldn’t I expect to get it? Because the stock market tanked? Not a sufficient reason.
You define retirees as leeches.
What I define you as is not allowed to be said under TTAC posting rules.
wmba, google “A Modest Proposal” or Jonathan Swift.