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Levin: GM should cover Delphi white-collar pensions

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Levin: GM should cover Delphi white-collar pensions

David Shepardson / Detroit News Washington Bureau

Michigan's senior U.S. senator wants General Motors Co. to reconsider its decision to not cover pension benefits for thousands of salaried retirees at the company's former parts unit.

U.S. Sen Carl Levin, D-Detroit, one the auto industry's strongest supporters, urged GM's new CEO Daniel Akerson to address the plight of 22,000 salaried and some hourly retirees at Troy-based Delphi Corp.

"We are all aware that these have been tough economic times for the domestic automotive industry and that difficult, painful decision(s) were necessary in order to restructure your company for long-time viability," Levin wrote in a Sept. 7 letter to Akerson that was made public today.

Levin said he had heard from many families in Michigan that were experiencing "significant hardships" as a result of the decision to end benefits for salaried retirees.

"In keeping with GM's tradition of commitment to its employees, and in light of the improved circumstances of GM, I urge you to review the decision not to cover the pension benefits for some Delphi retirees and to consider bringing all interested parties to the table in an attempt to bring a fair and equitable resolution to this situation," Levin wrote, sending copies to Treasury Secretary Timothy Geithner and the Delphi CEO Rodney O'Neal.

GM didn't offer any immediate comment.

GM and the Treasury Department ignored a similar plea made by Sen. Sherrod Brown, D-Ohio, in May.

During its bankruptcy stay, Delphi Corp. terminated its pension plans in July 2009, saddling the Pension Benefit Guaranty Corp. with a $6.7 billion liability for plans covering 70,000 people. Retirees and employees stand to lose $1.2 billion in pension benefits that exceed the maximum covered by the PBGC. Some will lose up to 70 percent of benefits.

Citing union contracts, GM opted to spend about $1 billion to cover pension losses by most Delphi hourly retirees -- largely for United Auto Workers retirees.

Earlier this year, then UAW-President Ron Gettelfinger backed the salaried retirees saying they "deserve to be treated with fairness and equity."

"Delphi's salaried retirees/former employees are being forced to bear extra burdens that are not warranted. The life they logically expected upon retirement no longer exists."

Most of the Delphi salaried retirees had been hired by GM and spent decades working at GM before the company spun off its parts unit in 1999. Delphi filed for bankruptcy protection in October 2006 and exited late last year.

Salaried retirees also lost life and health insurance benefits.

GM recorded $2.2 billion in profits in the first half of the year, but still faces an unfunded pension liability of nearly $27 billion.

The Treasury Department, which gave GM a $50 billion bailout and owns 61 percent of GM, has declined to comment.

Last week, the top House Republican, John Boehner of Ohio, met with salaried retirees at Delphi. He said "government-owned General Motors" had agreed to "to pick up the pensions of union retirees in full while salaried retirees were left to face a loss of hundreds of thousands of dollars in expected benefits."

Last month, Boehner and Sen. Roger Wicker, R-Miss., asked the Government Accountability Office to investigate the disparate treatment. GAO is to issue a report early next year.

Sen. Brown blocked the nomination of Joshua Gotbaum to head the PBGC for months. President Barack Obama -- in a rarely used maneuver -- temporarily installed Gotbaum through the use of a "recess" appointment in July.

From The Detroit News: http://www.detnews.com/article/20100913/AUTO01/9130381/1148/auto01/Levin--GM-should-cover-Delphi-white-collar-pensions#ixzz0zR3SCFl3

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