Panel One:

Panel Two

Panel Three:

Opening Statement
The Honorable Dan Burton
Oversight and Government Reform Committee

Hearing: "Delphi Pension Fallout: Federal Government Picked Winners and Losers, So Who Won and Who Lost?"

Dayton, Ohio - November 14, 2011

First, I want to thank Chairman Issa for convening this hearing today.  I also want to thank Sinclair Community College for hosting us. 

Mr. Chairman, Delphi Corporation was created in 1999 by General Motors (GM) through the spin-off of the company’s automotive components group into a separate entity.  In fact, many of the current Delphi retirees – hourly and salaried – spent the majority of their working career (on average over 25 years) with GM until they were involuntarily moved to Delphi.  Regrettably, in 2005, Delphi Corporation filed for Chapter 11 bankruptcy protection. 

On October 6, 2009, four years after entering Chapter 11, Delphi Corporation exited bankruptcy, as Delphi Holdings, under a restructuring plan facilitated by the Obama Administration and approved by the U.S. District Bankruptcy Court for the Southern District of New York.   Under the terms of the agreement, the Federal Pension Benefit Guaranty Corporation (PBGC) assumed responsibility for all of the Delphi pension plans – roughly $6.2 Billion in liabilities for six Delphi pension plans (covering approximately 70,000 employees and retirees).  

However, in a very unusual agreement as part of the restructuring plan, GM consented to use money from its own pension funds to supplement the 46,000 Delphi hourly (union) employees’ pension payments to make up for the 30 to 70 percent cut in benefits resulting from the PBGC’s takeover of the Delphi pension plans.  This unprecedented agreement was not extended to the 21,000 salaried workers and retirees.  By some estimates, this resulted in a 70 percent reduction in pensions and loss of health care for salaried Delphi retirees.

When questioned about the disparate treatment of Delphi employees and retirees, to this day, executives for GM will only say that the company agreed to supplement Delphi union employees and retirees because it had promised to do so in 1999; and that the company did not supplement Delphi non-union employees and retirees because it “isn’t something that GM has any control over” and “GM doesn’t have the legal obligation nor does it have the money to re-fund those pensions.”   The explanations offered by GM are woefully insufficient.  Once GM entered bankruptcy the contractual promise it made in 1999 was null and void, and it makes no business sense for a company trying to shed excessive debt to assume more debt. 

In reality though, the blame does not lie with General Motors.  I believe that evidence uncovered by this Committee and others clearly shows that the Obama Administration's Auto Task Force (ATF) made this decision for purely political reasons.  In fact Mr. Ron Bloom, former Senior Advisor to the Secretary of Treasury on the auto bailout admitted as much when he said at a celebratory dinner for the auto bailout team that he “did this all for the unions.”  On June 22, 2011 during the last Committee hearing on this issue when I questioned Mr. Bloom about this statement, he flatly and unequivocally denied ever having said that.  Unfortunately for Mr. Bloom, this statement was corroborated by a reporter for the the Detroit Free Press and in a book by Mr. Bloom's former boss, auto czar Steve Rattner.   Two weeks later after coming under fire from this Committee and the media about his blatant lie under oath, Mr. Bloom retracted his denial and instead claimed that he did not "recall" making the alleged statement. 

Mr. Bloom's actions are sadly typical of this Administration's blatant disregard for Congress' pursuit of the truth in this case.  To the best of my knowledge, all Congressional requests to the Administration about this case have either been ignored or obfuscated.   This is unacceptable and should not be tolerated; and I applaud the tenacity you have shown, Mr Chairman, to keep investigating this matter further so we can uncover the real truth behind the Delphi pension scandal. 

I said back in October 2009 when I, along with others, first requested a Congressional hearing on this issue that I understood that restructuring America’s auto industry required shared sacrifice and responsibility.  But Delphi’s salaried retirees are being forced to bear extra burdens that are not warranted and have not been explained.  It seemed to me at the time - and it still does - to be fundamentally unfair that salaried and union employees from the same company, who faced the same unfortunate situation, were treated so unequally by the Federal government. 

The American people, especially, from my perspective, the thousands of Hoosier families who have been impacted by this policy, and whose tax dollars were used to facilitate this travesty, deserve a full and transparent explanation from all parties involved.  Hopefully today we can move one more step closer to that explanation. 

Once again, Mr. Chairman, thank you for holding this hearing and I look forward to hearing from our witnesses.