Delphi White-Collar Pensions Need Fair Treatment, GM Told

U.S. lawmakers are pressing General Motors Corp. (GMGMQ) to make pension payments to bankrupt Delphi Corp.'s (DPH) white-collar workers, as GM has agreed to do for Delphi's hourly employees.

The potential loss of pension benefits for Delphi workers has become a heated issue on Capitol Hill. Some lawmakers have accused GM and the Obama administration of favoring Delphi's blue-collar, hourly workers at the expense of salaried employees.

Discussions among GM, Delphi and the Pension Benefit Guaranty Corp., the government agency that backstops corporate pension plans, are ongoing. Under a tentative plan, pensions for both salaried and hourly Delphi workers would go to the PBGC. But hourly workers would receive supplemental payments from GM, under an arrangement that dates back years when Delphi was spun off from GM.

U.S. Sen. Charles Schumer, D-N.Y., whose state includes many Delphi workers and retirees, urged GM on Monday to assume obligations for Delphi's salaried retirees as well.

"The salaried employees worked side-by-side with the hourly employees for decades and, therefore, this divergent treatment strikes me as unfair," Schumer wrote in a letter to GM Chief Executive Frederick "Fritz" Henderson.

A GM spokesman declined comment.

A PBGC takeover of Delphi pensions raises the likelihood that payments will be slashed, since federal law limits such payments.

Hourly, blue-collar workers often belong to unions, a key voting segment. The Obama administration has been accused of treating auto unions favorably at the expense of other stakeholders in the restructuring of the auto industry. The administration is overseeing the restructuring of GM.

In a letter to Treasury Secretary Timothy Geithner last month, more than a dozen members of Congress demanded an explanation for the decision to have the PBGC assume the pension plans for Delphi's salaried retirees.

"We respectfully ask that you direct the Auto Task Force to make public all documents concerning how this decision was reached," stated the letter, which was drafted by New York Congressmen Christopher Lee, a Republican, and Brian Higgins, a Democrat.

A Treasury spokeswoman declined comment.

- By Josh Mitchell, Dow Jones Newswires; 202-862-6637; [e-mail]