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GLARING OMISSION #18: DNC Speaker Doesn’t Mention Her Neighbors That Had Their Pensions Wiped Out By Auto Bailout

RNC Communications - September 6, 2012

THE GLARING OMISSION: Karen Eusaino Doesn’t Mention The Delphi Employees In Her Neighborhood Of Mahoning Valley, OH Who Lost Their Pensions

THE TRUTH: Obama Bailed Out Union Employees And Wiped Out The Pensions Of Non-Union Delphi Employees

In An “Unprecedented Deal” GM Bailed Out The Pensions Of Union Employees With Bailout Funds But Gave Nothing To Non-Union Workers. “Bruce Gump and his neighbors feared for their retirement checks when the federal government took over the pension plans at Delphi, the big auto parts maker where they once worked. But four months later, Mr. Gump finds himself in a far more perilous condition than his neighbors. On his street, he is the only Delphi worker whose pension benefits may be cut. His neighbors all belong to unions and have received a lifeline in an unprecedented deal related to the government-supervised bankruptcy of General Motors, the onetime parent of Delphi. Mr. Gump and some 21,000 other salaried workers and retirees are furious that their roughly 46,000 union co-workers at Delphi have had their benefits restored, apparently with government largesse, and they have not.” (Mary Williams Walsh, “For Delphi Pensioners, The Union Label Helps,” The New York Times, 10/26/09)

  • 21,000 Salaried Delphi Auto Workers Lost Up To 70 Percent Of Their Pensions In Obama’s Bailout. “The government took over Delphi's pension plan during the company's reorganization in Bankruptcy Court. Roughly 21,000 salaried employees lost up to 70% of their pensions, as well as life and health insurance.” (Andrew Seidman, “Obama Administration Favored Union Worker Pensions In GM bailout, House Republicans Say,” Los Angeles Times, 6/23/11)
     
  • The 1,056 Salaried Delphi Retirees In Mahoning Valley, OH Lost Nearly A Combined $58 Million In Pension Income. “It was estimated that the annual loss of nearly $58 million in pension income by the 1,056 salaried Delphi retirees would result in a reduced consumption of goods and services produced (directly or indirectly) in the Mahoning Valley.” (Frank Akpadock, “Measuring The Economic Impact Of Pension Reductions And Health Care Cuts On The Salaried Retirees Of Delphi Packard Electronic Systems Resident In The Mahoning Valley, Ohio,” Youngstown State University Center For Urban And Regional Studies, 9/2009)

Even Former UAW President Ron Gettelfinger Called It A “Grave Injustice.” “Even union representatives have sided with the nonunion employees. Ron Gettelfinger, former president of UAW, has said that the government's actions constituted a ‘grave injustice.’” (Andrew Seidman, “Obama Administration Favored Union Worker Pensions In GM bailout, House Republicans Say,” Los Angeles Times, 6/23/11)

As A Result Of Takeover By PBGC, 75 Percent Of Delphi Salaried Retirees Will Pay An Additional $4,000 In Health Care Deductibles. “The loss of health care benefits is another variable that the salaried Dephi retirees will lose in the event of a takeover of pension management by the PBGC. Based on the skyrocketing cost of health care insurance today, and the fact that buying private insurance is about three times as much as buying from one’s employer (on average), about 75% of the salaried Delphi retirees will pay about $4,000 per year or even more in deductibles.” (Frank Akpadock, “Measuring The Economic Impact Of Pension Reductions And Health Care Cuts On The Salaried Retirees Of Delphi Packard Electronic Systems Resident In The Mahoning Valley, Ohio,” Youngstown State University Center For Urban And Regional Studies, 9/2009)

  • Each Participant Would Face A Monthly Deductible Of $320. Monthly, Each Retiree Would Spend $650 In Out-Of-Pocket Expenses, Totaling $7,800 A Year. For The 1,056 Salaried Retirees, Expenses Would Reach $8.2 Million A Year. “Assuming that, on average, these retirees selected a Gold insurance coverage plan for themselves and their families, each participant would face a monthly deductible of $320, in addition to a monthly out-of-pocket cost (co-pay) of about $330 (doctors’ visits, dental, vision, eyeglasses, etc.) for family members. Monthly, each retiree is assumed to spend on average, a total of $650, or $7,800 a year, in out-of-pocket expenses. Since there are a total of 1,056 target retirees, a grand total of $8,236,800, or $8.2 million annually, was calculated.” (Frank Akpadock, “Measuring The Economic Impact Of Pension Reductions And Health Care Cuts On The Salaried Retirees Of Delphi Packard Electronic Systems Resident In The Mahoning Valley, Ohio,” Youngstown State University Center For Urban And Regional Studies, 9/2009)

For Every $1 Million Delphi Salaried Retirees Lost In Pension Income And Health Care Coverage, $21,000 Would Be Lost In The Mahoning Valley’s Economy. “This means that for every $1 million loss to the salaried Delphi retirees, another round of $1.21 million is being lost in the Mahoning Valley’s economy from rounds and rounds of reduced consumption of goods and services by these retirees. Putting it differently, this means that for every $1 million that the retirees lose due to reduced pension income and health care coverage, an estimated $21,000 would be lost in the Mahoning Valley’s economy due to rounds and rounds of reduced consumption of goods and services by these retirees.” (Frank Akpadock, “Measuring The Economic Impact Of Pension Reductions And Health Care Cuts On The Salaried Retirees Of Delphi Packard Electronic Systems Resident In The Mahoning Valley, Ohio,” Youngstown State University Center For Urban And Regional Studies, 9/2009)

  • $57.7 Million Will Be Lost In Mahoning Valley Due To Direct, Indirect, And Induced Fiscal Impacts Of The Reduced Pension Income And Health Care Costs Of The Delphi Retirees. “Since a grand total direct impact of $26.1 million of lost revenues was estimated each year in the process, an estimated total fiscal impact of $31.6 million annually was calculated for a grand total loss of $57.7 million annually due to direct, indirect and induced fiscal impacts due to the reduced pension income and health care cuts of 1,056 salaried retired employees of Delphi residing in the Mahoning Valley.” (Frank Akpadock, “Measuring The Economic Impact Of Pension Reductions And Health Care Cuts On The Salaried Retirees Of Delphi Packard Electronic Systems Resident In The Mahoning Valley, Ohio,” Youngstown State University Center For Urban And Regional Studies, 9/2009)
     
  • Due To The Lost Pensions, 1,740 Annual Employment Losses Are Estimated For Sectors Of The Mahoning Valley Economy.  “This means that for every $1 million of reduced retirees’ pension, an equivalent of 30 employment positions that are currently in existence or would be created in the future would be lost. In the process, a grand total of 1,740 employment losses was estimated annually from the primary, secondary, and tertiary sectors of the Mahoning Valley.” (Frank Akpadock, “Measuring The Economic Impact Of Pension Reductions And Health Care Cuts On The Salaried Retirees Of Delphi Packard Electronic Systems Resident In The Mahoning Valley, Ohio,” Youngstown State University Center For Urban And Regional Studies, 9/2009)

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