As President Barack Obama takes to the stump and touts his auto bailout as a big success that saved the auto industry, America and civilization itself, it will be important to keep in mind all of the bailout's human victims. These of course include American taxpayers, who stand to lose somewhere between $20 and $30 billion on their GM "investment" alone. Then there are the secured creditors of Chrysler who got back 29 cents on the dollar to UAW’s 40 cents, even though the creditors deserved priority since their loans were backed by actual assets. These creditors, btw, included not Wall Street fat cats, but middle-class folks like teachers whose pension money was invested in Chrysler bonds.
But the other group that got royally screwed but has not received as much attention is the salaried retirees of Delphi, a GM supplier. When the Obama administration commandeered the bankruptcy process, it invited GM and UAW representatives to the negotiating table. But it left out Delphi’s salaried retirees. The upshot was that the UAW retirees got their full pension and health care benefits. But the benefits of 21,000 Delphi retirees – who had often worked right next to their UAW peers – were determined as per a Pension Benefit Guaranty Corporation (PBGC) formula. Hence, some of them lost up to 70 percent of their pensions and all of their life and health insurance. Bruce Gump, a representative of the Delphi Retirees Association, testified before Congress last year that the Treasury could have covered 93 percent of the benefits of all employees for the same amount that it spent on full union benefits.
The association sued the administration, but to add insult to injury, the PGBC has been doing everything it can to help the Obama administration avoid embarrassing revelations about what exactly transpired behind the scene during the bankruptcy process. How else to explain its foot dragging in turning over documents that the Delphi retirees have been demanding as part of their discovery process? The agency has been claiming that the documents being requested were so numerous that it needed time to put them together. That was two years ago.
So blatant is its procrastination that a fed up Detroit federal magistrate today granted Delphi retiree’s a “Motion to Compel” discovery, requiring PBGC to turnover the requested documents within 90 days. If it doesn’t, it could well be held in contempt.
What all of this shows is that some workers are more equal than others in Obama Land. If Rick Santorum, who is positioning himself as the blue-collar conservative candidate, is looking for reasons to “throw up,” this would be a good one. May be Santorum should do a public barfing every time President Obama touts his bailout as a smash success?