WASHINGTON (Sept. 13, 1:45 p.m. ET) — An Ohio senator wants to give $1 billion from a General Motors stock sale to salaried Delphi Automotive retirees who lost much of their pension coverage during the supplier's bankruptcy proceedings, but the Delphi Salaried Retirees Association says it prefers another solution.
U.S. Sen. Sherrod Brown, D-Ohio, plans to introduce a bill Thursday that would force the U.S. Treasury to sell about $1 billion of its GM stock holdings and put the funds in an account that would supplement the Delphi retiree pensions.
“Many Delphi retirees have yet to receive the pensions they earned and deserve,” Brown said in a statement. “Now that General Motors is profitable once again and the federal government is preparing to sell its stake in the company, a portion of the proceeds should be used for those shortchanged retirees.”
The Treasury, as a result of the 2008-2009 bailout of GM, owns about 500 million shares of GM stock, a stake valued at about $11.6 billion at current market prices. GM shares closed today at $23.13, up 16 cents.
Den Black, chairman of the Delphi Salaried Retirees Association, said his group would prefer a solution that does not require taxpayer dollars or slow-moving legislation.
“We're more than happy for all the help we can get from anywhere but the issue here is that this can be fixed now,” Black said.
He said the association has been working on several ways to achieve the goal, including proposing an administrative action to use funds from the government's Pension Benefit Guaranty Corp. instead.
The association filed a federal lawsuit against Pension Benefit Guaranty Corp. in Detroit in October 2009, which is in the discovery phase, Black said.
A Brown spokeswoman said that in addition to his proposal, Brown also supports the retirees' proposed settlement, and has been working with U.S. Sen. Debbie Stabenow, D-Mich., to persuade the administration to also consider that proposal.
GM owned Delphi until 1999, but still has received parts from the company since. Delphi filed for bankruptcy in 2005, and subsequently sold off or closed most of its U.S. plants. It emerged from bankruptcy in October 2009.
When Delphi terminated the pension plans of 70,000 people in 2009, it left a $7.2 billion shortfall.
During the bailout, GM topped off the pensions to Delphi hourly workers, most of whom are in the UAW, but did not do the same for Delphi's more than 21,000 nonunion salaried retirees.
The Pension Benefit Guaranty Corp. assumed the pension plans and must pay $6 billion of the losses, but retirees would still lose about $1 billion or more, the Government Accountability Office said in December, The Detroit News reported.