In a move which will impress voters in the crucial rust-belt states, President Trump issued an order last week to restore the losses of around 20,000 salaried retirees of the Delphi company. Their pensions were cut by roughly two-thirds as part of the Obama-Biden administration’s bailout of General Motors (GM). Affected retirees lost an average of $300,000 in pension benefits.
Photo credit: MANDEL NGAN
At his campaign rally in Waukesha, Wisconsin, the President talked about his action: “This week I signed an order to protect the pensions of workers at the Delphi Corporation … these workers were taken advantage of very badly. When GM went bankrupt, Biden and Obama threw these workers to the wolves. Their pensions were totally wiped out, they were treated very unfairly. My order is to restore the pensions and healthcare benefits promised to workers in Wisconsin, Michigan, and Ohio because I will never let anyone rip off our great American workers. We’re going to take care of our workers.”
From the memorandum:
“The Secretary of the Treasury, the Secretary of Commerce, and the Secretary of Labor, in consultation with the Assistant to the President for Trade and Manufacturing Policy, shall review the Delphi matter described in subsection 1(a) of this memorandum and inform the President within 90 days of the date of this memorandum of any appropriate action that may be taken, consistent with applicable law, to address affected Delphi retirees’ lost pension benefits, and bring additional transparency to the decision to terminate the plan, consistent with appropriate protections for privileged and confidential material. This review shall include an evaluation of the feasibility of enacting legislation and whether the plan may be restored to its pre-termination status under section 1347 of title 29, United States Code.”
Background of the case
Photo credit: Shawn Thew—EPA/REX/Shutterstock.com
In the Obama-Biden administration’s 2009 bailout of General Motors (GM), the Pension Benefit Guaranty Corporation (PBGC) terminated the pension plans of about 20,000 non-unionized workers employed by auto parts supplier -Delphi Automotive Systems. At the time, Delphi employed nearly 50,000 Americans who earned about $30 an hour but was in the process of relocating work from 21 of its 29 US plants to Mexico, China, and other foreign countries. Reports found that 20,000 Delphi workers would lose around $440 million from their pension. This worked out at between 30 to 70 percent being knocked off individual pensions.
When questioned on this impact at the time, Vice President Biden said in a 2012 interview, “some of them got hurt, but the vast majority, because of the federal pension board they have out there to make up differences when companies go under like this, most did fine.” When challenged by the interviewer that many Delphi workers, who were not union members lost portions of their pensions and were not fine, Biden said it was “out of the White House’s control.”
President Obama, pictured with Timothy F. Geithner in 2009.
Credit...Ron Edmonds/Associated Press
Contradicting this, emails discovered by the Daily Caller from August 2012 revealed that Obama’s Treasury Department, headed by Timothy Geithner was “behind terminating the pensions of 20,000 salaried retirees at Delphi.” Emails showed, acting director of the PBGC, Vince Snowbarger sent internal memos to begin the process of enacting the pension cuts and indicated he had received the green light from Obama administration officials. The Daily Caller found, the move “appears to have been made solely because those retirees were not members of labor unions.”
Impact of the Trump Administration Memorandum
Director of the Office of Trade and Manufacturing Policy, Peter Navarro, said the Trump administration was unable to act earlier to help the retirees as the retirees had been in court arguing that the decision to cut their pensions violated both federal law and practices of the Pension Benefit Guaranty Corp. Once they had tried all legal remedies, Navarro said they approached their representatives, Republican Sen. Rob Portman and Republican Rep. Mike Turner. Those two then brought their case to Trump, who “took one look at it and looked at me and said ‘Fix this.’ That is what we are trying to do here.”
Mr. Navarro said, he had been working on the memorandum for roughly six weeks, and was acting “as quickly as possible.”
The goal is to come up with a solution to make the pensions whole, via executive action power. As to what moves could be used exactly, Mr. Navarro said “I don't want to get ahead of the process, but ... there are some regulations within the PBGC that allows them some discretion in addressing precisely these kinds of issues. And it's been invoked several times before, so we are going to look at that really carefully." He will also consider legislative solutions, but noted “the problem is that Congress does not want to do much of that lately." Regardless of the election’s outcome, Trump is “fully committed” to helping the Delphi retirees.
Delphi retiree Bruce Gump speaking on behalf of the Delphi Salaried Retirees Association who challenged the PBGC’s decision in federal courts, said the Trump administration action was “the best news we have had in 11 years.” He said he hopes it will help the non-union retirees get back the pension and health insurance benefits they lost. Gump said “this was a result of the Obama/Biden administration choosing to not treat the salaried workers as they did the union workers. The union workers had their full pensions paid up or they were topped off with the tax dollars given to General Motors. The salaried workers were thrown to the wolves. You know what’s worse than hatred? Indifference.”
Den Black, Board Chair of the Delphi Salaried Retirees Association, added, the DSRA Board of Directors and members sincerely appreciate and are grateful to President Trump for his intervention to achieve closure. “People who were in their 50s and 60s at the time — couldn’t start over.” He said, “it was just egregious to people who worked hard and played by the rules.”
Carol King received a first-class BA (honors) in History and Politics from Stirling University, along with an exceptional commendation for a study on US public opinion and Foreign Policy. She also completed a year of study at University of London before taking up a Graduate Proctor Fellowship at Princeton University. She further completed a MPhil in American Politics at Dundee University. Aspiring to be a writer/commentator on American politics, she now writes for UncoverDC.