Free Markets, Free People

Obama administration complicit in cutting non-union GM employee pensions

Despite denials, it appears the Obama administration had a hand in cutting the pensions of non-union GM workers.  Another “unexpected” event from the transparent administration:

New emails obtained by The Daily Caller contradict claims by the Obama administration that the Treasury Department would avoid “intervening in the day-to-day management” of General Motors post-auto bailout.

These messages reveal that Treasury officials were involved in decision-making that led to more than 20,000 non-union workers losing their pensions.

Remember, this is the same administration that perverted the bankruptcy system to favor unions and essentially screw investors.  This is more evidence of the administrations concerted effort to save their prime constituency by treating non-union workers differently and using their benefits as a means of cutting costs while mostly preserving union benefits.

This came to light in Congressional hearings yesterday:

At a Wednesday hearing, the House Oversight Committee’s Subcommittee on Regulatory Affairs, Stimulus Oversight and Government Spending started pushing the Treasury Department for answers on the effects of the bailout and on how much of a role the department played in picking winners and losers.

The key point of the Wednesday hearing was to show that the Obama administration advised GM on how to eliminate the Delphi workers’ pensions. The evidence suggests Geithner’s team played a significant role in that process, despite claims to the contrary.

This despite administration testimony previously claimed no involvement:

In 2009 congressional testimony, senior Obama administration official Ron Bloom said the president told the Treasury Department to stay out of the management of these companies and downplayed any administration intervention.

“From the beginning of this process, the President gave the Auto Task Force two clear directions regarding its approach to the auto restructurings,” Bloom said then. “The first was to behave in a commercial manner by ensuring that all stakeholders were treated fairly and received neither more nor less than they would have simply because the government was involved. The second was to refrain from intervening in the day-to-day management of these companies.”

But the emails TheDC obtained show high-ranking Treasury Department officials, including Matthew Feldman of Treasury’s Auto Task Force, corresponding with senior GM officials on how to make certain decisions regarding who was going to win and who was going to lose.

You can’t put it any clearer than the Daily Caller does – this is government picking winners and losers.   Not only that, it is clear that the administration has favorites and no qualms whatsoever about throwing unfavored constituencies under the bus to ensure their constituency benefits.

Is that the purpose of government?

~McQ

Twitter: @McQandO

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15 Responses to Obama administration complicit in cutting non-union GM employee pensions

  • But the emails TheDC obtained show high-ranking Treasury Department officials, including Matthew Feldman of Treasury’s Auto Task Force, corresponding with senior GM officials on how to make certain decisions regarding who was going to win and who was going to lose.

    SOP in the Obamabanana Republic.  Markets don’t pick winners…thug pols and bureaucrats do.  The rule of law is pissed on.
    And people wonder why the economy is in the crapper…!!!

  • You know, I’ve been thinking about this: other than the politically-connected, who in their right mind would invest in GM?

    Leave aside for a second the actual business of this firm: the car market, the quality of its vehicles, distribution concerns, and so on. 

    Simply from a regulatory stand-point, we know three things: (1) the Obama administration essentially owns GM; (2) operational decisions are made at least partially, if not wholly, based on political value; and (3) the Obama administration has already shown that they are willing to screw stock- and bond-holders when the going gets rough.

    Why on Earth would anyone buy shares or bonds in GM? Not only are you incurring greater risk than the average investment (due to government decisions that may bankrupt you at a moment’s notice), but asset appreciation is laughable at best. It doesn’t even offer a dividend, for Pete’s sake!

  • I seem to recall some ancient concept called “rule of law”; I see that Ragspierre uses the term, too.  Can he or somebody else explain this ancient and apparently disused concept?  If I am not mistaken, it was once regarded as a highly desirable thing.

    / sarc

    From the beginning of this process, the President gave the Auto Task Force two clear directions regarding its approach to the auto restructurings,” Bloom said then. “The first was to behave in a commercial manner by ensuring that all stakeholders were treated fairly and received neither more nor less than they would have simply because the government was involved. The second was to refrain from intervening in the day-to-day management of these companies.

    Does anybody believe this horsesh*t????  The administration shat all over the stockholders of GM and Chrysler in order to favor the UAW; are we to believe that this was against the explicit instructions of the president?

    • Ah, I see part of your problem.  Note the term “stakeholder” in your quote.  That is a post-modern term that can mean “pretty much anybody” (since businesses impact the environment, doncha see).  That eclipses “shareholders” and LOTS of other constituents.
      Of course, the rule of law thingy USED to mean that secured creditors…bond-holders and stockholders…GOT their security BACK (or first dibs on the leavings) if things went to flinders.   It also meant that CONTRACT was honored, and a bunch of other rational ideas like that.  But all that has become very PLASTIC and MALLEABLE under the Obamabanana Republic…which generates uncertainty like nothing else could.

      • RagspierreNote the term “stakeholder” in your quote.  That is a post-modern term that can mean “pretty much anybody” (since businesses impact the environment, doncha see). 

        Ah, I see.  You are wise, master.

        ;-)

        • The guy is still a damned liar, though.  Top to bottom…
          “The first was to behave in a commercial manner by ensuring that all stakeholders were treated fairly and received neither more nor less than they would have simply because the government was involved. The second was to refrain from intervening in the day-to-day management of these companies.”

  • The more we learn about Obama and his administration the less respect I have for him and them.

  • This is the moment when we must build on the wealth that open markets have created, and share its benefits more equitably. Trade has been a cornerstone of our growth and global development. But we will not be able to sustain this growth if it favors the few, and not the many.  Barack Obama

    Contrary to the claims of some of my critics and some of the editorial pages, I am an ardent believer in the free market.  Barack Obama

    On every front there are clear answers out there that can make this country stronger, but we’re going to break through the fear and the frustration people are feeling. Our job is to make sure that even as we make progress, that we are also giving people a sense of hope and vision for the future.  Barack Obama

    I just miss – I miss being anonymous.  Barack Obama

    I wish you still were.

  • Actually, this was a way to transfer the cost of Delphi pensions to the US taxpayer. The PBGC has been notoriously underfunded for years. Effectively, Delphi managers will receive less than 50% of what they were promised.

    • Managers?  You think the only non-union people Delphi employs are managers?
       
      Fortunately for the employees most of them are probably pretty close to having fully vetted pensions.  The payout from PBGC is more or less related to how close a pension is to being fully vetted.  So many will get more like 80% give or take.
       
      As for this being ‘a way to transfer cost’ to the US taxpayer, that is what probably could have happened (maybe should have happened) in the bankruptcy to all of GM’s employees.  And its what would have happened if GM had liquidated.

  • Delphi was already spun off from GM for 10 years at this point.  Delphi workers were no longer GM employees.
     
    Delphi entered bankruptcy while separate from GM in about 2005.  I’m not sure what the obligation here is suppose to be.

    • If there was no obligation, then why do these emails exist?
      OTOH, all of these things are not showing up on Yahoo News headlines…they are all about Cantor leaving the talks.
      No media attention…let’s see how these scandals carry.

      • Because they bought back some of the operations out of the bankrupted company in 2009.  Something they had to do as Delphi was folding operations one by one in their bankruptcy.  And before that, they were funneling money to Delphi above and beyond their contractual obligations to keep it alive.  Something that happed facility they request for a bailout.
         
        If they took on their pensions, they would be taking on new debt obligations that weren’t theirs in 2008.
         
        Maybe there’s not big news because we’re seeing things out of context and someone is trying to pretend there’s a bigger story here when there is.

  • ‘happed facility they’ -  should read ‘happened to facilitate their’.   Hmmm… I don’t think I made all those typos myself.