Letter to Mr. Fritz Henderson, GM CEO
Letter
Letter to Mr. Fritz Henderson, GM CEO
SCHUMER: DELPHI SALARIED WORKERS GOT A RAW DEAL; CALLS FOR GM HEAD TO REVERSE DECISION TO EXCLUDE WORKERS FROM PENSION DEAL
Schumer, In Personal Letter, Urges GM CEO To Treat Delphi Employees Equitably And Take On Pension Of Delphi's Salaried Workers
15,000 Workers Across The Country Will Be Impacted
Schumer: Including Some Employees While Leaving Others By The Wayside Is Fundamentally Unfair
U.S. Senator Charles E. Schumer, in a personal letter, today asked GM CEO Fritz Henderson to reverse the decision to refer the pension plans of the Delphi Corporation's salaried retirees to the Pension Benefit Guaranty Corporation (PBGC). Schumer urged GM to treat these workers in the same manner as all other Delphi workers absorbed by GM, and fully fund their pensions, in addition to the pensions of other Delphi employees. Schumer noted that these retirees have already been subjected to cuts in their health and life insurance benefits, and that any further cuts would place too great a burden on retirees, many of whom started their careers at GM, and only became Delphi employees when the two companies split.
"The way Delphi's salaried retirees are being treated is fundamentally unfair," said Schumer. "Many of them have been long time employees and some even began their careers, decades ago, as GM employees. They have sacrificed enough already, and to ask them to accept another burden is unfair and unreasonable. They deserve equitable treatment, and that's why I am urging Mr. Henderson to reverse this decision and fully fund the salaried retirees pension benefits."
General Motors has already agreed to assume the pensions of Delphi's hourly workers, and today Schumer said that the salaried workers deserve the same treatment. Schumer noted that if the pensions are transferred to the PBGC, the benefits may be cut by up to 70%. Delphi was originally spun off from General Motors in 1999 and has been operating under Chapter 11 bankruptcy protection since October 2005. Delphi is GM's largest supplier and sold the company $5.5 billion in parts and services in 2008, accounting for 31 percent of Delphi's revenue. Since Delphi declared bankruptcy in 2005, GM has taken charges of almost $11 billion to pay for the restructuring efforts of Delphi's North American operation.
Schumer has long been a supporter of Delphi and its employees. In May of this year, in an effort to preserve New York jobs, he called on GM to repurchase four Delphi plants, including the two in Lockport and Rochester. He is now working to protect the pensions of the plant's salaried retirees.
In the letter, Schumer wrote: "The salaried employees worked for decades and, therefore, deserve equitable treatment."
The full text of the letter is below:
Dear Mr. Henderson:
For the past few months, I have been watching the ongoing negotiations between General Motors and Delphi very closely. Thousands of workers across New York State, both active and retired, depend on these companies for their livelihood. I was pleased to learn that as part of your restructuring agreement with the Treasury Department, you will assume the pension obligations of Delphi's hourly workers. This is an important move that will help ensure retirement security for thousands of families across Western New York.
I believe that Delphi's salaried workers deserve pension security, too. I think it is a mistake that the pensions for Delphi's thousands of salaried retirees are not part of the deal, and that the pension plan for the salaried workers is being referred to the Pension Benefit Guaranty Corporation (PBGC). This move threatens the security of the pension payments, as PBGC may cut them drastically or even eliminate them altogether. The salaried employees worked side-by-side with the hourly employees for decades and, therefore, this divergent treatment strikes me as unfair. The President has said that the restructuring of America's auto industry will require shared sacrifice from every involved party, but it is not equitable for Delphi's salaried workers to see their pensions defaulted to PBGC.
I do recognize the efforts that GM and Delphi are making to keep the essential Delphi jobs in New York State. As you know, I have been a champion of GM re-acquiring the Delphi plants in Lockport and Rochester, and am very pleased that things appear to be moving in a positive direction on this front. This is a move that I believe is good for GM and good for New York and its loyal and productive GM-Delphi workers.
Still, it does seem to me that treating the pensions of the salaried workers different that the pensions of the hourly workers is unfair. I urge you to reevaluate the decision in light of the adverse impact it could have on those who devoted decades of their lives to GM and Delphi.
Thank you for your consideration of this important matter. I look forward to your prompt reply.
Sincerely,
Charles E. Schumer
United States Senator
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