Treasury Secretary Timothy Geithner cut pensions of non-union salaried workers at Delphi, a GM spin off in order to help GM emerge from bankruptcy, according to a report in the Daily Caller. A group of former Delphi employees that lost their pensions and life insurance during the bailout says that it was the U.S. Government’s involvement in the bailout that caused them to lose their benefits.
The Obama administration cut more than 20,000 people’s pensions. Republican Reps. Mike Turner of Ohio and Dan Burton of Indiana are asking House Oversight Committee Chairman Darrell Issa, California Republican, to investigate whether or not Geithner cut non-union employees while protecting unions.
When government gets involved government, by nature of it’s involvement, is picking winners and losers. Government does not produce it’s own wealth, therefore government must take wealth from those that do earn wealth. In the U.S. that occurs through taxation. A large portion of the taxes that We the People pay are for legitimate purposes. But in cases like the auto bailout, the government used our money to give one group, the group those currently in power favored, benefits over a group those in power did not favor.
The auto bailouts continue to provide evidence of why government needs to stay out of the economy.
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Do the people at Delphi think they’d still have jobs and benefits if 2 of the big 3 automakers ceased to exist? If they had tried to cut the benefits of the union workers, they just would’ve ended up in court, not that that makes it fair, but the workers at Delphi presumably had a choice not to unionize and benefited in some ways for that choice.
The government picks winners and losers by what it doesn’t do, too. For example by not regulating the financial industry they allowed huge profits to emerge based on unsound financial transactions and by not inforcing environmental regulations they allowed the culture at oil companies to diverge from good safety practices.
Yes, Delphi would still be in business (after their run thru Bankruptcy Court). Only about half to two-thirds Delphi’s business was with GM and Chrysler. Non Big 3 business was increasing yearly.
As for the union contracts, GM AND DELPHI went to court, Bankruptcy Court. And the bankruptcy judge has the authority to cancel ALL contracts (Labor Union and others) in the effort to save the company (and I might add, company JOBS). Even though there was a contract for GM to make the Union Pension plan whole if Delphi (a GM spin-off coompany) were to go bankrupt (which it did), the GM bankruptcy made that contract null and void as well.
As for the US Government’s intervention into the bankruptcy, Lynn is right about the government’s role whether to be IN or OUT of the scenario. But once the US Government became involved, it has the responsibility to be sure all parties are treated fairly. Is it fair to use TARP related funds to “top off” (i.e., make whole) the Hourly Pension Plan (mostly union folks) and not the Salaried Pension Plan (mostly non-unionized folks)?
The issue is not union versus non-union (even the Union Presidents are on record of agreeing with us). The issue is not whether or not the government should be involved (two administrations dipped their toes in the water; Uncle Sam was IN). The issue is FAIR TREATMENT of all impacted parties….. from a retired Delphi Salaried Employee with a reduced pension.