The federally backed Pension Benefit Guaranty Corp. (PBGC) took on Delphi’s pension obligation in 2009, after Delphi had spent nearly four years in bankruptcy.
According to its payment formulas, the PBGC often pays less than retirees had expected to be paid from their former private employers. In September 2009, a group of salaried Delphi retirees, many of them Dayton-area residents, sued to restore their full pensions.
Both General Motors and Delphi suffered stints in big bankruptcy cases more than a decade ago. But Delphi salaried retirees always questioned why they lost their full pensions when GM salaried retirees, and Delphi union-represented workers, were made whole.
“It’s just a flat-out injustice to the Delphi salaried retirees,” Navarro said in a phone interview Thursday afternoon.
Asked about a possible executive order by Trump, Navarro called that “the likely scenario."
“You have a situation where, the Pension Benefit Guaranty Corp., has the money.” he said. “This does not require a congressional appropriation, and it doesn’t hurt the taxpayer in any way. There is money at the PBGC.”
Asked about the timeline involved, Navarro said White House legal advisors need to examine the issue.
“We have to run some legal traps first,” he said. “You look at your options. You have to look at what your statutory authorities are. You draft the document, then you have to run the traps over at the Office of the Legal Counsel and (the Department of) Justice. That takes some time.”
He added: “It’s a high priority. I will personally try to move this at least in terms of the legal review as quickly as we can.”
He argues that the Obama administration consciously excluded salaried retirees from a restoration of their pensions.
“That’s exactly what they did. And they did it as a matter of expediency,” Navarro said. “They did it because the salaried employees didn’t have the political clout that either Wall Street or the big labor unions did. It was very clear what happened.”
Over the years, spokespeople for the PBGC have said they followed laws written by Congress in deciding how much of the pensions the salaried retirees could be paid. The impetus at work, they said, included protecting the taxpayers.
During the heady days of the Great Recession and government efforts to save the domestic auto industry, GM — which once owned Delphi — found a way to “top off” or supplement pensions for Delphi retirees represented by unions, even though GM wasn’t legally required to do that after GM’s own trip through bankruptcy in 2009.
The PBGC did not respond by deadline to a message seeking comment.
Navarro defended Trump’s record on trade and manufacturing, saying Thursday that GM’s Lordstown plant has been proven to be a “great success” in the aftermath of the GM closure there.
GM announced in November 2018 that it would idle its Lordstown plant, affecting some 4,500 workers in all.
In May, though, Lordstown Motors CEO Steve Burns said he planned to hire an initial 600 workers at the 6.2-million-square-foot facility he bought from GM last year.
Burns said those workers will build the first Endurance all-electric pickup trucks that Lordstown Motors is designing. He plans to hire thousands more, he has said.
Navarro offered to give Joe Biden a personal tour of the Lordstown facility.
“Come on down to Lordstown,” he said with a laugh. “I’ll personally give him a tour of Lordstown and its environs.”
David Pepper, chairman of the Ohio Democratic Party, released a statement in response, saying in part:
“The Trump administration ignored the workers of GM Lordstown for years, starting with Trump’s very first day in office, when GM laid off more than 1,000 workers. The workers of GM Lordstown begged Donald Trump to do something to help them for years -- for years. He ignored their pleas. And then when the plant was finally shut down, Trump had the audacity to go on Twitter and blame the workers and their union leaders."
Chuck Cunningham, a leader of the Delphi Retirees Salaried Association, welcomed the president’s attention.
“We’re at the top of the food chain, if you will,” said Cunningham, a Florida resident.
He agreed that the PBGC has the money to restore the salaried retirees' pensions. In the legal discovery process, retiree plaintiffs suing the PBGC unearthed actuarial information showing that the corporation does have the resources to pay it, he said.
And given how the markets have performed since 2009, he added, Cunningham believes the retirees' pension assets by now should be “overfunded.”
“We’ve had proof all along that they have the money to do this,” he said.