General Motors released the following press statement regarding the status of Delphi pensions:
“Delphi has announced that it has entered into an agreement with the Pension Benefit Guaranty Corporation (PBGC) regarding the settlement of PBGC’s claims from the termination of the Delphi pension plans. In the event of termination, PBGC will become statutory trustee of the plans and will pay benefits in accordance with federal law.
“There have been questions about General Motors Company’s responsibility toward Delphi’s pension plans, given that many of those covered were GM employees prior to GM spinning off Delphi in 1999. General Motors Corporation made appropriate provisions for the plans at the time of the spin-off, and Delphi became responsible for the plans from that point forward. As a result of bargaining at the time of the spin-off, General Motors Corporation did agree to top-up pension benefits for certain limited groups of hourly employees and retirees in the event that the Delphi hourly pension plan was terminated. As with other union agreements that it has assumed from the old GM, General Motors Company will honor these commitments.
“General Motors Company and PBGC have reached a preliminary agreement whereby the PBGC would receive a $70 million cash payment from GM, as well as a portion of future distributions to GM from the new company that acquires Delphi assets upon resolution of its bankruptcy. GM expects to receive such distributions in return for capital contribution to the new company. Details will be communicated after the Delphi bankruptcy agreement is finalized.
“This is a very difficult situation, and we understand the personal sacrifices that Delphi employees, retirees and many others, including GM employees and retirees, have made and continue to make during this industry-wide crisis. However, GM has met and continues to meet its obligations toward the Delphi pensions, and General Motors Company continues to support Delphi’s emergence from bankruptcy at considerable cost to the company.”
