Sherrod Brown Puts Hold on Obama Appointee for PBGC Over Delphi Pensions

Ohio’s own Senator Sherrod Brown has placed an indefinite hold on President Obama’s nomination of Joshua Gotbaum to head the Pension Benefit Guaranty Corporation in a bid to force the Obama administration’s intervention on behalf of retired Delphi workers whose pensions were jeopardized by GM’s bankruptcy last year, the Pee Dee is reporting.

For those who don’t know, the PBGC takes over the pensions of failed companies. Typically, they can continue to provide pension payments, but usually about half of what was previously promised to the retired workers by their former employers.

According to Wikipedia, Delphi is an automotive parts supplier that was spun off from GM in 1999. Six years later, after disclosing that it had fudged its books, Delphi filed for Chapter 11 bankruptcy. As part of this bankruptcy, Delphi cancelled its pension plans, which were duly taken over by the PBGC, and closed 21 of its 29 U.S. plants.

The issue over which Sen. Brown is holding Gotbaum’s nomination is this: when GM declared bankruptcy, it agreed to supplement the PBGC pensions for Delphi UAW retirees, saying it was obligated to do so by its contract. However, non-union former Delphi employees received no such supplement. Brown is pressing that the government, which owns 60% of GM as the result of the old GM’s bankruptcy and subsequent rescue by the government, should intervene to force the new GM to make good on its pension promises to its non-union as well as union Delphi retirees.

I have to tell you, however you feel about the nuances of bankruptcy law, this is a brilliant political move for Brown. The issue of Delphi retiree pensions is huge in the Mahoning Valley, where many socially conservative people vote Democratic because they are looking for someone to stand up for worker’s rights. While the true battle over worker pensions and bankruptcy was lost when bankruptcy law was changed in the 1980s to allow companies to cancel their pensions in the first place, at least Sen. Brown is reaching for every tool possible to get justice for these retirees.