Trump Memorandum Promises Review of Delphi Pensions
WASHINGTON, D.C. — In the latest chapter of the ongoing fight of Delphi Automotive Systems salaried retirees to have their pension benefits restored, a memorandum issued by President Donald Trump promises a review of the situation.
In a statement following the memorandum that was issued Thursday, Sen. Rob Portman, R-Ohio, applauded the president’s memorandum, which states that the secretaries of the treasury, commerce and labor – currently, Steven Mnuchin, Wilbur Ross and Eugene Scalia, respectively – in consultation with Peter Navarro, the assistant to the president for trade and manufacturing policy, will review the Delphi matter and inform the president within 90 days of any appropriate and lawful action to be taken.
“I’d like to applaud President Trump’s executive action to help the more than 5,000 Delphi retirees in Ohio today,” Portman said in a statement. “I have fought for years to help these Delphi retirees receive the pension and health care benefits they have earned after getting a raw deal from the Obama administration. They deserve to have their pensions restored. Today’s news means they are one step closer to seeing their pension benefits reinstated, and I’m pleased the president took action to help them.”
The review will include an evaluation of the feasibility of enacting legislation to restore the benefits and “whether the plan may be restored to its pretermination status,” according to the memorandum. It will also provide more transparency on the decision to terminate the pensions.
U.S. Rep. Tim Ryan, D-13, however, stated that the situation requires “action, not more reviews.”
“Multiple times I have urged President Trump to intervene on behalf of Delphi salaried retirees,” Ryan said in a statement. “I support any effort that will fix this egregious issue and stand ready to work with the Administration to help make Delphi salaried retirees whole, but they need action, not more reviews. I have worked across the aisle since day one on this issue, calling on both the Obama and Trump Administrations to intervene on their behalf. Delphi salaried retirees shouldn’t have to wait another day to receive the benefits they earned.”
Both Portman and Ryan have worked along with Sen. Sherrod Brown, D-Ohio, and U.S. Rep. Bill Johnson, R-6, for years to try to get the pensions restored. Ryan and U.S. Rep. Mike Turner, R-10 Ohio, led a bipartisan group of members of the House on Sept. 30, as well as in April and May, to urge the President to intervene on behalf of Delphi salaried retirees. Click HERE to read their letter from Sept. 30.
The nearly 20,000 salaried, nonunion retirees live mostly in critical swing states in the Midwest, most notably Ohio and Michigan.
Their fight goes back to 2009, when their pensions were terminated as part of a taxpayer-funded bailout of General Motors. They lost up to 70% of their retirement benefits when trusteeship was transferred to the Pension Benefit Guaranty Corp.
On Sept. 4, the PBGC responded to Ryan’s letters on the subject stating, on Sept. 1, “a three-judge panel of United States Court of Appeals for the Sixth Circuit ruled in PBGC’s favor in the lawsuit,” in which the Delphi Salaried Retirees Association challenged the termination of the salaried plan.
“According to the panel, ‘the retirees have not raised any argument warranting reversal’ of a previous federal District Court ruling in PBGC’s favor,” the PBGC stated in its letter to Ryan. Click HERE to read the letter.
In addition to the 90-day review of the matter, the memorandum states that the three cabinet members will meet with Assistant to the President for Economic Policy to review the pension plans held in trusteeship by the PBGC “and inform the President within 180 days of the date of this memorandum of any appropriate action that may be taken consistent with applicable law.”
Just after 5 p.m. Thursday, Trump tweeted he had signed the order, tweeting “Obama-Biden FAILED American workers and FAILED the workers of Delphi. I ALWAYS put American workers FIRST!”
In March 2019, the U.S. District Court Eastern District of Michigan ruled PBGC acted within the law when it terminated the salaried retiree pension plan per an agreement with Delphi in 2009.
Delphi was spun off from General Motors Corp. in 1999 and filed for bankruptcy protection for its North American operations in 2005.
In 2009, during the Great Recession, the Obama administration restructured the auto industry and brought GM through a speedy bankruptcy. Negotiations between the administration’s Automotive Task Force, Delphi and GM concluded GM would assume liability of the pension plans of Delphi’s hourly workers, but not its salaried employees.
As part of Delphi’s continued restructuring in Chapter 11, the company sought to jettison its pension plans to the PBGC, arguing it didn’t have the financial capability to fund the program. Thus, the PBGC would cover just a fraction of those pensions. In July 2009, a bankruptcy court in New York approved the deal.
In September 2009, members of the Delphi Salaried Retiree Association sued in federal court, alleging the PBGC violated the Employee Retirement Income Security Act of 1974, or ERISA.
Delphi, formerly Packard Electric, once had a large presence in the Mahoning Valley, employing more than 14,000 at its plants on North River Road in Warren.
The Associated Press contributed to this article.
Copyright 2021 The Business Journal, Youngstown, Ohio.