June 23, 2006
by Jason Roberson Detroit Free Press
Some workers face deadline today
The deadline for at least one attrition offer for GM and Delphi workers is today. Last week at the UAW constitutional convention in Las Vegas, UAW President Ron Gettelfinger said 25,000 GM workers already had accepted either the buyout or early retirement offer, and 8,500 Delphi workers had accepted early retirement or an offer to secure a job at GM. Workers who fill out their attrition paperwork today have until next Friday to change their minds.
Some Delphi Corp. workers, reading the fine print of their early retirement program and other documents, are having second thoughts about leaving the auto-parts supplier, which is in bankruptcy.
Their concern? In October 2007, General Motors Corp.'s guarantee to cover pensions Delphi can't pay is to expire with the UAW contract.
Leaders of the union and the company say workers should trust them, but several dissidents don't. And some rank-and-file workers, like Tony Nacelewicz, a 54-year-old hourly UAW worker at Delphi's Kokomo, Ind., plant, can't figure out what to do. He signed up to retire Wednesday, but he has a week to change his mind.
"Basically it seems we're signing away everything and leaving ourselves at the mercy of the union or the company," Nacelewicz said. "It's kind of scary signing it, because we're facing this deadline without knowing all the facts."
The controversial pension proviso stems from an agreement GM signed with the UAW in 1999. GM then was spinning off its parts division as a separate company.
The UAW pushed to keep the wages and benefits for parts-making Delphiworkers the same as their GM cohorts. Plus the UAW got GM to guarantee that, if this new venture called Delphi failed or had trouble funding pensions, GM would step in and offer financial support.
Fast forward seven years, and half of that has come to fruition: Delphi filed for bankruptcy in October in part because it said it couldn't afford workers' wages and benefits. Moreover, Delphi is to resume a bankruptcy court hearing Aug. 11 to get permission to cancel union contracts and eliminate retiree medical and life insurance benefits.
But the GM benefit guarantee still has not kicked in because Delphi has not terminated its pension plan, said GM spokeswoman Toni Simonetti.
If Delphi terminates the pension plan, the Pension Benefit Guaranty Corp. -- the U.S. government-run pension insurance fund -- would pay a portion, usually about 60%. The benefit guarantee agreement between GM and the UAW says GM then would fund the remaining 40%, or whatever portion the PBGC doesn't pay.
The agreement on GM's benefit guarantee is scheduled to expire in October 2007. That would leave Delphi, whose future is uncertain, as the sole backer of the pension fund.
If Delphi terminates its pension plan while in bankruptcy, Simonetti said, GM would expect to recoup the money needed to make the pensions whole through a bankruptcy claim on Delphi's remaining assets.
Delphi's attrition plan, introduced March 22, offers high-seniority workers $35,000 to retire early. A second part of that plan allows workers to secure one of 5,000 positions back at GM. But Delphi also is responsible for the pensions of those employees who flow back to GM, according to the form employees sign when electing that option.
Nacelewicz, the hourly worker with 22 years' experience, said he fears the penalty of not accepting the early retirement offer.
"I'm kind of between a rock and a hard place," he said. "If I don't take it, then I have to stay here and face a prospect of a lot lower wages and benefits."
Union officials passed out a flyer Wednesday at Nacelewicz's plant informing workers that, even if they select the early retirement option, they could change their mind if an additional Delphi attrition plan is approved by the bankruptcy judge on June 29.
This second plan offers buyouts between $70,000 to $140,000. A deadline has not been set.
Well-known UAW dissident Gregg Shotwell, a 55-year-old hourly Delphi machine operator from Coopersville, asked UAW Vice President Richard Shoemaker about the pension guarantee in front of more than 1,000 delegates at the UAW constitutional convention.
"I will retire from Delphi, but the company is bankrupt," Shotwell said. "What happens if Delphi stops paying on the pension fund after the GM benefit guarantee expires?"
Shoemaker then beckoned Shotwell to approach the podium to answer his question in private. According to Shotwell, Shoemaker said the UAW will have to negotiate pension protection with GM during next year's contract talks.
Before Delphi workers can accept the attrition offer, they must first sign a waiver saying they agree not to sue any officers or directors of Delphi, GM or the UAW. In signing, they also acknowledge they are satisfied with the terms of the plan and that they understand Delphi and the UAW may at anytime amend the program.
"I'm not going to relinquish my right to sue GM or Delphi for a pension I rightly earned," said William Hanline, a 57-year-old hourly Delphi worker from Athens, Ala.
In a series of e-mails leaked to the Free Press, Delphi CEO Steve Miller responded to Hanline's questions about his distrust of Delphi's ability to back the pensions.
"I feel sorry for you, that you have become so alienated by circumstances that you have no confidence in the integrity of the leadership," Miller responded. "It makes the communication effort very difficult if you assume you are being fed lies. That is simply not the case."
Miller operated under similar conditions at a previous job as CEO of Bethlehem Steel. He arrived three weeks before the company filed for Chapter 11. The company had 12,000 active workers and 130,000 dependents, almost an 11-to-1 ratio.
The bankruptcy court forced a termination of the pension plans. The net result was that about 90% of the retirees received full pensions under the PBGC, while 10% -- younger than 65 or highly paid workers -- were subject to the government maximums.
"Not a great outcome," Miller said in an e-mail. "But I would doubt anyone could credibly argue that anyone else could have changed that outcome."
A Delphi spokesman pointed out that Miller managed to save the other nine pension plans with which he has been involved.
Miller has stressed throughout the bankruptcy that Delphi's transformation plan must be robust enough to support its pension plans.
The biggest danger for Delphi employees, Miller said, would be a strike, which the UAW has threatened.
"Delphi has every intention of paying for the accumulated pension obligations forever into the future," Miller said. "I cannot give you a guarantee, because there is no certainty that the labor dispute won't result in crippling production disruptions. The pension money comes from revenues generated by the business -- if the business is disrupted, so is our financial capability."
Contact JASON ROBERSON at 313-222-8763 or jroberson at freepress.com.
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