Senator Portman Supports Retired Delphi Workers Who Lost Pension Benefits, at Congressional Hearing

WASHINGTON, D.C. – Senator Rob Portman (R-OH) and Representative Dave Camp (R-MI) submitted a letter during today’s Congressional hearing to support the testimony of retired Delphi salaried workers – including Ohioan Bruce Gump – who did not receive equal treatment during the General Motors bankruptcy. 

“These are hardworking Ohioans who played by the rules, have families to support, and who lost a significant portion of their pension benefits, while other retirees from the same company received far better treatment,” said Portman. “Beyond the personal impact to thousands of families, this also hurts communities across Ohio at a time when our state is already struggling economically. This matter deserves further Congressional attention.”

When Delphi’s defined benefit pension plan was terminated, Delphi workers lost an estimated 30 to 70 percent in benefits. The Auto Policy Task Force subsequently decided to “top-up” the pension benefits of union retirees, not the 20,000 salaried retirees.  This has had a severe economic impact on thousands of retired Delphi salaried employees in Ohio, such as Bruce Gump.  Gump worked for GM for 23 years and Delphi for 10 years in the Delphi Packard plant in Warren, Ohio.  An economic impact study by Youngstown State University found that decreased retiree income and benefits will cost the Dayton area about $80 million per year and cost the Youngstown area about $58 million per year in lost economic activity.

Mr. Gump testified at today’s House Oversight and Government Reform Committee, Subcommittee on Regulatory Affairs, Stimulus Oversight, and Government Spending hearing entitled, "Lasting Implications of the General Motors Bailout." 

The text of the letter follows.

June 21, 2011

Chairman Jim Jordan

Subcommittee on Regulatory Affairs, Stimulus Oversight and Government Spending

House Committee on Oversight and Government Reform

2157 Rayburn House Office Building

Washington, D.C. 20515

Chairman Jordan:

We commend you and the Subcommittee for holding Wednesday’s hearing titled: “Lasting Implications of the General Motors Bailout,” specifically as it pertains to the disparate treatment of Delphi retirees during the General Motors (GM) bankruptcy.

In September 2009, a decision was made by President Obama’s Auto Policy Task Force to “top-up” the pension benefits of union retirees from Delphi but not those of salaried retirees from the same company. Previously, in June 2009 Delphi Corporation’s defined benefit pension plans were terminated, resulting in an estimated 30 to 70 percent reduction in benefits for Delphi salaried and union retirees.  

On March 30, 2011, the U.S. Government Accountability Office (GAO) released a report detailing the key events leading to the Delphi pension termination and the omission of a large number of salaried retirees.  GAO is also expected to release a future report specifically examining how the Pension Benefit Guaranty Corporation’s handling of the Delphi pension termination compares with that of other, similar terminations.  In addition, the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) is investigating this issue and is expected to release a report later this year. 

While the initial GAO report is useful in providing a chronology of events, it does not provide satisfactory answers for the disparate treatment of Delphi retirees.  The 20,000 salaried retirees, ranging from shop-floor supervisors and salespeople to engineers and office managers, spent many years at Delphi, a major employer and economic engine in towns across our states.  These men and women earned their pensions the American way, through hard work and dedication.   However, these salaried retirees will lose a significant portion of their pension benefits, while those they worked next to for years will receive their full promised benefits.  This is troubling, and merits further scrutiny by Congress.

The GAO and SIGTARP reports, as well as the findings from the Subcommittee’s hearing, will be helpful in determining the reasons and justification for the disparate treatment of Delphi retirees.   As such, we thank you for holding this important hearing and appreciate the time and attention the Subcommittee has devoted to this issue.

 Sincerely,

Senator Rob Portman / Representative Dave Camp

CC:     Chairman Darrell Issa

Ranking Member Elijah Cummings

Subcommittee Ranking Member Dennis Kucinich