The Constitutional Death of the UAW "Part 5"

By William Hanline and friends

"Foresight or a Bumbling Politician?"

A few days after the "Hatchet" Steve Miller placed Delphi under bankruptcy protection Richard Shoemaker, A.K.A. "Cooperation Partner #1" took credit for having the foresight to negotiate a "Benefits Guarantee" for former GM employees who were spun-off in case Delphi went belly up financially. Whether Shoemaker’s announcement in Chicago was political or conciliatory, a question remains, did he have the foresight, or did GM and Delphi negotiate the Benefits Guarantee pursuant IRS, ERISA and U. S. Supreme Court mandates pertaining to pensions?

The fact is that the Delphi "spin-off" did not legally involve the UAW at all! The Delphi spin-off was a transaction between General Motors Corporation (GM) and the newly formed Delphi Corporation’s management. The GM-Delphi Benefits Guarantee agreement provides language (contact me for a copy) which simply states that if Delphi falls short of funding your pension or health care benefits, GM will make up the difference. Only after the Department of Labors EBSA, the IRS and the SEC approval the spin-off was the UAW involved and only to the extent of negotiating the 2003 Delphi 2003 National agreement. That is why the same Benefits Guarantee was negotiated for the other Delphi employees (former GM employees) who are represented by the other national unions.

So why are they Negotiating? The answer is obvious. Contained in the GM-Delphi Benefits Guarantee is the following language:

"Any modification or amendment of either the Plan, or the Plan as modified and supplemented by this agreement may be made retroactively by the Corporation WITH CONSENT OF THE UNION."

Furthermore, the language states:

The corporation maintains its tax-exempt status for contributions to its pension plan and with the consent of the union, the corporation can even retroactively reap tax breaks for any modification or amendment to the pension plan, provided the changes to the "pension benefits under the Plan are not DIMINISHED."

Gettelfinger and Shoemaker have already negotiated diminished retirement benefits at GM and Ford and the UAW "Cooperation Partners" are now hard at it at Chrysler and Delphi. Ironically, the Delphi pension plan and the GM pension plan for all practical purposes are one of the same.

Would GM have problems funding the Benefits Guarantee? Sounds like it would not for just recently GM’s CEO Rick Wagoner announced the GM’s pensions fund is currently $6 billion OVERFUNDED. This is strange since other reports filed by analysts place the cost of GM assuming the Benefits Guarantee in the middle of $0 to $11 billion or 6 billion dollars, which is identical to what Wagoner claims GM has in extra funds. Sounds good doesn’t it? Even though it sounds good by Wagoner’s figures, GM would have no trouble paying for the Benefits Guarantee, the reality is the PBGC (Pension Benefits Guarantee Corporation) says if GM went belly up, that by the U.S. Government’s standards, the GM pension fund is 30 Billion dollars under funded.

Whom do we believe? One thing we can believe in, there is a Benefits Guarantee. If the guarantee is altered and the benefits reduced or diminished, it has been done after the fact, after the guarantee was negotiated between Delphi and GM in 1999.

Days after the "Cooperation Partner’s" announcement about the Benefits Guarantee, Brother Gregg Shotwell and I made futile requests of both International and local union officials for a signed and dated copy of the Benefits Guarantee. They refused to give us a signed and dated copy. Not wanting to, but with Shoemaker and his UAW legal counsel forcing our hand, we contacted the U.S. Department of Labor requesting they get us a "signed and dated copy" as required under Sect. 104 of the LMRDA. They did just that, for in a December 16, 2005 letter the UAW’s General Counsel Mr. Daniel W. Sherrick wrote to the DOL the following.

"As you requested, I was able to find in our archives a copy of the document bearing the initials of the lead bargainers from each side, Richard Shoemaker for the UAW and Dick O’Brian for General Motors. A true copy of that paper is attached ---- that paper in all respects identical to that distributed to the Local Unions, made available to the membership, and already in Mr. Shotwell’s and Mr. Hanline’s possession."

So Brothers and Sisters in Delphi, Brother Shotwell and I would like to say "YES" there is an initialed and dated "Benefits Guarantee" with GM designed to protect your pension benefits if Delphi is granted Bankruptcy and the UAW contract with Delphi is dissolved by the Judge. We should feel fairly secure then, right? Wrong!

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