Report: Larger White House Role in GM Bankruptcy
WASHINGTON -- A report office by office of the Special Inspector General for the Troubled Asset Relief Program found that the Obama Administration took a larger role than represented earlier in the General Motors bankruptcy case.
Salaried employees of Delphi, a GM parts supplier and former subsidiary, have charged that the administration ‘s intervention resulted in differences in how pension funds for unionized and salaried workers were handled during the courts of the GM bankruptcy, picking “winners and losers.”
According to the report, the U.S. Treasury Department used the “significant leverage” it had in funding GM’s bankruptcy and becoming the majority owner for the new GM to reach financial agreements with the two stakeholders it believed could hold up the bankruptcy, the bondholders and the United Auto Workers. The administration auto team made clear to GM that it wanted an agreement with the UAW prior to bankruptcy, according to the report, and a top-up of pensions for Delphi’s UAW workers was among the UAW’s priority items.
“Treasury’s auto team did not agree to top up the pensions of other former GM employees at Delphi, which did not have active employees at GM, and therefore had no leverage to hold up GM’s bankruptcy,” the summary of the report stated. Subsequent to the bankruptcy the new GM agreed to top the pensions of other smaller unions to head off a potential strike or prolonging of the bankruptcy that GM believed would impact its ability to survive.
"SIGTARP's [Special Inspector General for the Troubled Asset Relief Program] finding that Treasury was greatly involved in the involuntary termination of our pension plan legitimizes our request that Treasury end its cover up,” said Dennis Black, chairman of the Delphi Salaried Retirees Association. “It's withheld emails and other documents from us for 18 months. We just want our day in court. If Treasury's done nothing wrong, it should be as transparent as President Obama promised his administration would be."
The report, said U.S. Sen. Rob Portman, R-Ohio, confirms some of his “deepest concerns that thousands of hard-working Ohio Delphi employees” weren’t treated fairly and that the Obama Administration was involved. “I urge further investigations of this issue to make sure that the suffering families across Ohio who did not receive the benefits they were promised have at least the decency of an answer as to why other retirees from the same company received far better treatment,” Portman continued.
Published by The Business Journal, Youngstown, Ohio.
CLICK HERE to subscribe to our free daily email headlines and to our twice-monthly print edition.