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Delphi disparity in pensions is GAO focus; No preference found for Auto Task Force

The Obama administration's Auto Task Force did not mandate that General Motors Corp. provide full pensions to its unionized retirees at Delphi Corp. while reducing retirement benefits to the company's salaried retirees, government investigators said in a report this week.

"The Auto Task Force did not dictate what should be done with the Delphi pensions," the Government Accountability Office said in the report.

The report's findings contradict the suspicions of the 20,000 members of the Delphi Salaried Retirees Association, including about 750 from Western New York, who worried that they were cheated out of part of their pensions because the Obama administration favored unions for political reasons.

The timeline laid out by the GAO traces what happened to pensions from GM's spinoff of Delphi in 1999 to its assumption of Delphi pension responsibility amid the auto industry crisis of 2008-09.

Despite the report's lack of evidence that the union-friendly Obama administration dictated that the union retirees be favored, supporters of the non-union retirees said they remain suspicious.

"This report makes it more evident than ever that there was preferential treatment given to the unions at the expense of Delphi retirees," House Speaker John A. Boehner, R-Ohio, said in a statement. "The Delphi retirees deserve an explanation for this, and they deserve accountability."

Under the government-supervised GM bankruptcy, the "new GM" agreed to "top up" pensions for United Auto Workers retirees at Delphi and those at other unions. But salaried employees saw their pensions cut by upward of 70 percent.

The decision to keep union retirees whole stemmed from the fact that the new GM had a contractual obligation to do so for its UAW employees, the government auditors said. There was no such commitment requiring the company to provide full pensions to the Delphi salaried retirees.

Jim Frost, a leader of the retirees from the Delphi facility in Lockport, said the timeline the government auditors had written was helpful, but he disagreed with the conclusion that the government didn't dictate unfair treatment to the non-union employees.

"We had meetings with these people" in the Auto Task Force, Frost said. "I know what their attitude was."

The salaried employees maintain that they were victims of political influence and have filed a federal lawsuit in which they hope to prove it.

In addition, the inspector general for the Troubled Asset Relief Program, or TARP, the government financial bailout, is investigating the issue.


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