DETROIT -- Delphi Corp. salaried retirees picketed outside General Motors headquarters today, hoping to spur the bankrupt automaker to assume payment of their pensions if Delphi emerges from its own Chapter 11 reorganization as planned.
The retirees fear Delphis strategy for emerging from its nearly four-year bankruptcy, scheduled for review at a July 23 court hearing, could result in their underfunded pensions being taken over by the federal governments Pension Benefit Guaranty Corp. That would mean a reduction in retirement pay for many of the retirees.
GM, Delphis former parent, has agreed to take over Delphis hourly retirees pensions. The picketers said GM should do the same for salaried pensions.
Delphi spokesman Lindsey Williams said Delphi would not be able to fund its employees' and retirees' pension plans after it emerged from Chapter 11 because of financier Appaloosa Management LP's pulling out of a deal in April 2008 that would have brought the supplier out of bankruptcy. He also cited "historic deterioration in the capital markets and global automotive industry."
"Delphi understands and shares the disappointment of salaried retirees with regard to the companys inability to achieve a workable solution to its pension funding issues," Williams said in an e-mail.
Dozens of retirees marched in 90-degree heat carrying signs that listed the number of years they had worked for Delphi and for General Motors before Delphi was spun off in 1999.
We were promised that our benefits wouldnt change -- by GM, said Mary Meyer, who retired in 2007 from the powertrain division at Delphis headquarters. She worked 34 years for Delphi, 26 of those while it was owned by GM.
If the federal pension agency takes over the white-collar pensions, retiree Ken Hollis monthly payment would drop from $3,400 to a maximum of $1,741.50, according to the agencys Web sites list of federal limits on its pension payments.
Nobody asked which side of the Delphi-GM split we wanted to be on, he said. If we have to make sacrifices, it should be spread across the board.
The protest was just one of the retirees steps to oppose the plan, said Chuck Cunningham, a former Packard Electric executive who serves on the salaried retirees associations legal team. They already have filed multiple objections in Delphis bankruptcy case.
GM did not immediately return calls requesting comment.
As part of GMs and Delphis plans to emerge from bankruptcy, the automaker plans to take back some Delphi operations, including its steering business. GM has also agreed to provide $2 billion in cash and credit to help fund a $3.6 billion investment in other Delphi assets that would be sold to Platinum Equity, a private equity firm.
Earlier this year, Delphi canceled health care benefits for white-collar retirees.