Sunday, September 21, 2008

Delphi Update-2

"The federal government's pension-insurance agency, frustrated by missed pension payments and the lack of a resolution with bankrupt auto-parts titan Delphi Corp., said it would go to court Friday to secure a claim on an additional $900 million in Delphi assets. ... The Pension Benefit Guaranty Corp., [PBGC] is trying to increase pressure on Delphi and its former parent, General Motors Corp. On Tuesday. the agency sent its second letter in the past month to GM and Delphi executives urging GM to absorb at least $1.5 billion in Delphi pension obligations before Sept. 30. ... The letter to Delphi and GM executives comes as GM and other Detroit auto makers are making a plea to lawmakers in Washington for as much as $50 billion in federal loans. ... Delphi's pension plan, which covers about 85,000 people, had obligations of $14.05 billion at the end of 2007, but was underfunded by $3.3 billion according to [SEC] filings", Jeffrey McCracken at the WSJ, 11 September 2008.

The PBGC should not have let Dephi be formed without GM fully funding Delphi's pension plan. Where was the PBGC in 1999? Where is the DOJ? Will anyone from GM get indicted over this? Or will the PBGC continue playing around in bankruptcy court? You might be amazed to see how quickly GM could find $1.5 billion, if GM's executives believed, one-by-one they would be sent to federal prison, should Delphi's pension liabilities not be paid.

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