Delphi pensions: In 2010, President Obama’s scheme to bail out the auto industry (i.e., the United Auto Workers union) decimated the pensions and benefits of about twenty thousand white-collar, nonunion, salaried employees at Delphi, an auto-parts company that was a spin-off of and supplier to GM. Pensions of Delphi union members were not affected. From 30 to 70 percent of salaried Delphi employees’ pensions were lost. These nonunion pensioners at Delphi also lost all their health- and life-insurance benefits. The pensions of union members became fully funded, and 90 percent of the union pensioners’ health care benefits were retained.
The Obama administration made the choice to favor union members over nonunion members in settling GM’s debt. Proving that political favoritism instead of purely business necessity was the driver of the decision may be difficult. However, the decision has been traced to the Treasury Department rather than an independent corporation as originally claimed by the administration. It appears the Obama administration may have violated federal law and the Fourteenth Amendment (equal protection clause) of the Constitution.