to to be the ranking member i also want to recognize our colleagues here and thank them for joining us this morning it's always great to hear from our colleagues who have firsthand knowledge of what's going on in their district and how it affects their constituents and appreciate the second panel as well for taking time to come and share their experiences and their expertise today's hearing why arks the opportunity for us to examine truly delphi corporations bankruptcy and the effect that it had on its workers and retirees i do look forward to hearing in detail how different types of workers and retirees will bear under delphi's bankruptcy and what lessons we as policymakers might take away from this experience as we move forward before we begin however i'd like to make two critical points first as our witnesses will explain today we should all be deeply troubled to hear that certain specific workers appear to have been treated differently in connection with the company's bankruptcy than others some employees and retirees appear to have been given preferential treatment in the bankruptcy process and they will enjoy full benefits many others some of whom we will hear from today are facing dramatic cuts in their pension and their health benefits under any circumstance it is shocking to learn that workers who work side by side for the same company could find themselves in completely completely uneven situations apparently some would suggest for purely political reasons the second and even more important it is deeply troubling to me that the role of the federal government in dictating this unfair outcome is entirely unclear what was that role since february of this year when president obama announced the creation of a presidential task force on the auto industry the federal government has been intimately involved in reshaping this segment of our economy to an unprecedented level what the american people do know is been pieced together through media reports and court  filings not from the administration itself so much for the transparency and accountability that we heard about we do know that the treasury department in the president's hand picked cars are were deeply involved in the negotiation of the restructuring of general motors we do know that washington is now a majority shareholder in general motors holding some sixty percent of its stock we do know that the p b g c the pension benefit guaranty corporation has terminated delphi's pension  plans the illegality of this action is presently being challenged in federal court and we do know the general mordor motors has agreed to quote top up unquote the pension of some workers notably those in certain politically powerful unions while leaving other workers and retirees high and dry however there is so much more that the american people and that we don't know at this point what's the culpability of the federal government in this situation what role did the white house and the auto task force play how active was it in determining winners and losers and what terms did they dictate to those questions we have no answers here we are today with an opportunity to receive answers it defies logic mr chairman that the administration and its auto task force are not going to be here before us this morning to explain their actions and their role in this deceit in these decisions we had hoped that the senior adviser to the task force mr ron bloom what i answer those questions unfortunately it appears that the majority was not interested in having mr bloom present today this is extremely disappointing and another example i believe of this administration failing to live up to its promises promises of accountability and transparency but more to the point as a matter of substance it leaves a huge gaping hole in our understanding of the true facts surrounding de bankruptcy and does a disservice to those who have so much at stake in this matter so mr chairman we look forward to another hearing to provide an opportunity to gain that true transparency to the decisions that were made political economies politicians picking winners and losers are very dangerous i'm hopeful that this subcommittee will be allowed to completely investigate what happened in this situation the chairman mentioned that there are a lot of things wrong in this country there are a lot of things right in this country but one of the things i believe that is to the detriment of this nation is when politicians get involved in specific decisions that pick winners and losers and what ought to be an agreement as the chairman mentioned recognized and adhered to previously made by free individuals and free situations so i'm honored to be joining you this morning i appreciate the panel's before us thank you without objection opening statements from any of the members of the committee will be accepted in the records my understanding mr kildee has a specific you know i must consent request you want to make at this time yes you mr chairman thank you very much  investigate the handling of delphi corporation's pension obligations and i truly do commend you for doing so and as a result of this restructuring negotiations between delphi and the treasury department's auto task force many delphi workers and retirees have seen changes to their pensions we all know that's very evident however as you are aware these changes were not equally distributed among these current and former delphi and as a result of the restructuring negotiations between delphi corp g m the auto task force delphi's pension obligations will default to the pension benefit guaranty corporation however certain hourly workers were experience little or no pension reduction because of the unprecedented agreement brokered by the auto task force to top up these pensions you'll hear from members of the delphi salaried retirees association discuss this in further detail but what this decision means that the pension benefits salaried delphi retirees could be cut as much as seventy percent for approximately twenty thousand workers across this country and that's just wrong just in the last year alone last year alone their health care benefits gone life insurance benefits gone and now this delphi retirees have long depended on these benefits for their financial security and retirement i've seen with me here today i have with me here today just in the last week hundreds of pieces of correspondence that i received from delphi retiree's from across the country in just one week their stories i got to tell you are painful to read these letters tell you the stories of men and women who work twenty thirty even longer g m and delphi doing their job day in and day out building american products helping our local economy cross the country and in the these are places like western new york ohio michigan these men and women who work for delphi with the promise of current and future compensation bonded t the efforts by these workers they were depending on these benefits for a safe secure and healthy retirement once one such person i want to make note of is a gentleman david david shad from lockport new york worked for m for twenty five years delphi for another ten and dissipated retirement pension is anticipated retirement pension had already been cut by thirty percent from what was originally promised by him back in october of two thousand and eight he was promised health care benefits once he retired to reach the age of sixty five and these are gone now the pvc is expected to dramatically reduce its pension benefits on top of what was already cut in two thousand and eight and he described his personal situation like this uncertainty of benefits no healthcare in a for a one designed over thirty five years ago to be supplemented with a healthy pension that is shared his retirement plans and after carefully planning his retirement that he thought would begin in his early sixty's he now expects to work until at the age of at least seventy he's certainly not alone these are countless stories that i've i've read other stories like administration to intervene and provide fair and equitable treatment for delphi hourly instead of salary retirees at a minimum these decisions and how these decisions were reached ought to be explained efficiently to these workers i want to call your attention to an important congressional request that demands the attention of this committee on june twenty fourth more than five months ago twenty two members wrote to treasury secretary tim geitner request that he direct the auto task force to make public all documents concerning how the decision to dispose of these pensions were reached including the relevant documents written communications and memoranda between the auto task force delphi and their agents and representatives and i also ask unanimous consent to address have this put into them without objection following the senate health education labor transparency and open government and given that the american taxpayer is now a majority shareholder of g m i believe that the taxpayers who deserve answers and a full explanation as to how these inequitable decisions were made on behalf of delphi's retirees and american taxpayers who are financing g m s recovery i'm here to seek the support of this committee for this request and your assistance in demanding the immediate release of these documents from the auto task force and the treasury department i'm grateful that this committee is beginning to investigate what is truly happening here but how can proper oversight be performed on these decisions if the administrator will not release the information to make a decision only through the public release of these documents can congress effectively exercise its oversight authority and responsibility and i thank the chairman member to me this opportunity to speak out mike thank you we appreciate your participation comments concerning questions of the actions of this administration facilitated by the bankruptcy of delphi corporation has had a major impact on my community of dayton ohio the dayton region is actually the birthplace of  the company was founded as the dayton engineering laboratories company which evolved through the hard work of ohioans into delco division of general motors motors subsequently spun off delphi which at one point was the largest supplier of general motors m and my father worked in factories for forty years when delphi declared bankruptcy in two thousand and five the company decided to close or sell several facilities in my congressional district including two facilities in dayton as well as a facility in kettering moraine in vandalia the job loss at these facilities has been estimated at over five thousand jobs the effect of plant closures have been felt throughout the dayton region as many of our family members neighbors friends or delphi the job loss associated with bankruptcy was further increased by the closing of a general motors plant in moraine ohio which results in the loss of five thousand additional jobs jobs losses also extended to small manufacturers  suppliers throughout ohio lost delphi and general motors since delphi entered bankruptcy in two thousand and five many of us in ohio have worked on a bipartisan basis to assist those affected in the state of work my colleague senator brown to help secure emergency assistance for auto workers and with representative tim ryan to help provide trade adjustment assistance to dislocated workers today's hearing is a response yet another loss to my community at the hands of delphi corp this summer delphi when they petitioned for the united states supreme court's approval to turn over pensions for retirees to the pension benefit guaranty corporation result in additional loss to my constituents these actions are resulting in approximately fifteen thousand delphi retirees  by some estimates this means a seventy percent reduction in pensions of some retirees the new compounds the prior laws of health care benefits earlier this year a bipartisan group of ohio representatives petitioned the administration to help retirees from general motors plants in da and i'd also like to thank governor ted strickland for his support and senator sherrod brown for all his work in the on this issue including a hearing in the senate and for a particular reason the original packard electric was started in my district in warren ohio by the packard brothers so this has been a company that has been around for a long long time in warren ohio and now with this bankruptcy it is all come to a head here and bankruptcy as you know too often been used as a means to jettison commitments as you stated earlier made to workers and leave behind retirees and that needs to change one category of those left behind the hourly retirees represented by the  pensions topped off under agreement with g m thanks to the efforts of this administration and others their health care benefits are in danger of being lost and furthermore some workers with the smaller unions have still been left completely behind the other category  which we'll hear about today is the delphi salaried retirees who i believe should have had their issues regarding both pensions and health care dealt with in the context of the g m bankruptcy thankfully that will pay the retirees a large percentage of their promised benefits but even with that many retirees will see substantial losses is unacceptable and needs to be fixed furthermore all retirees from delphi will see substantial reductions in or outright elimination of health care coverage without the stimulus bill the situation would be even worse as many retirees are eligible for an eighty percent health care tax credit i have spoken with many retirees who are now concerned about how they will be able to afford their mortgage their health care costs and even their children's college tuition bills including nick drag of h a member of a local seven one seven in my district we drove out to be at this hearing nick started at delphi then called packard packard electric shortly after high school and worked there through g m's ownership and the delphi spinoff putting in over thirty four years of service in exchange for that service he like everyone else with local seven one seven has been bounced around by companies that do not want to honor their commitment the harm of lost pensions and health care does not stop with the direct losses there are so many retirees in my congressional district that the losses will flow to everyone in the region as senator brown mentioned a recent youngstown state university study stated that the total losses of the mahoning valley could be over fifty seven million dollars annually those losses translate into over seven hundred job losses in our region the bankruptcy system must be reformed to give a higher creditor status to retirees many of the creditors currently above retirees are in a position to make informed decisions about the credit worthiness of borrowers and set rates accordingly as you mentioned in your opening statement furthermore we need to tighten risk in other pension protection laws to preserve promised benefits r thirteen twenty two introduced by congressman john tierney is a great example of exactly what needs to be done to prevent more situations like delphi's and what my region saw over the last thirty years in the steel industry an employee cannot possibly plan for unexpected cuts in promised benefits after the game has been played once again we see systematic misalignment of who pays for other people's rest but unfortunately even these steps are taken even if these steps are taken it is too late to help many of my also emerge from bankruptcy as a viable hannity the last obstacle in settling bankruptcy was delphi's pension liabilities although other options were considered including purely political decision for what reason i can't tell you i mean i can only speculate but it was not for contractual reasons the other three were mentioned by the previous panel they all had contracts also and they also had side agreements i heard them argue that bankruptcy court which i personally and so it was a contractual there were other reasons for th have requested these documents under the freedom over two months ago but the production of documents by the treasury has not been forthcoming in fact a written request for these documents was also made by sen who have lost medical benefits and have suffered pension reductions is tragic and congress should certainly consider providing relief to these hard working but hard hit americans but it is critical that we view their loss in its larger historical and social to ensure employee benefits from a terminated defined benefit plan participants in studebaker and other companies receive benefits from available plan and if there were not sufficient plan assets benefits were reduced or eliminated in accordance with the plan provisions allocating insufficient assets to various benefit categories in studebaker the plan had enough assets to pay full benefits only to retirees other employ of employees would have suffered catastrophic losses in signing many to poverty in old age even with the distressingly large losses that some delphi and every delphi and is better off because congress perspective that is an amazing success story and we need to ensure that strength and resources to continue its important mission and that affect the funding rules make unfunded plan terminations such as the one we're seeing today benefit guarantee is actually reduced so that will be lower than fifty four thousand dollars a year so let's start with benefits that were not eligible for the these were normal retirement benefits that were not  the work with it and try to figure out a way to come to some solution would have a practical impact i cannot promise you that but i think he's given us a very promising start that we could work with recognize friend the ranking member famous chairman and i want to thank the panelists especially for your remarkably candid and compelling testimony about the challenges that you're facing right now and i astounded at the unresponsive members of the administration to give information about how these decisions were made and we all should be so i want to thank you for the information that you provided to us  today regarding that evidence in your testimony that we have definitive evidence unquote that acted under power in the department of treasury on the release of these lanes would you would you care to expand on that as well let me make certain that i didn't have another item on your on your testimony let me let me go let me do that let me go to mr cunningham and talk about that evidence the treasury involvement is clear in the documents related to the g m bankruptcy part of the bankruptcy court filing i mean you'll see them in the testimony all through the the bankruptcy court in the g m bankruptcy and we have i believe we have submitted some of those to the committee again we will get them to you those specific pages we also have a unfortunately we're still and and and this is another irony we're still battling with other other folks to be able to make those those records public even though they detail that must be out there with the treasury and the automotive task force would be tremendous i mean we have verbal statements from people we don't have a right to give any sense about why this deal was cut oh absolutely there's no reason there's no  had to have a viable delphi because delphi was still by far and large their largest supplier delphi could not execute the sale to the defined without having those overseas assets available if you look at the valuation of this company the valuation of the entire of delphi was exceeded by the value of those overseas assets and it wasn't just factory that would be sold these were ongoing commercial operations that were making profit and in fact this was done on a net present value basis which i consider to be very conservative and i think that it our hurry absolutely and that the rush on that was due to the government and the treasury at least from what we can ascertain as well as many public statements that they could not allowed  in your testimony why do you believe folks have said there was a contract that necessitated the topic but i think that's expeditious on their part to say that i mean i believe the treasury would much rather have the person it seems to me that's affected by the loss that your whole family to i mean ordinary people to me which i think we all are really you want to put your kids to school you want to have a home you want to be able to get health care and at the end of the day for retirees america companies have have gone into bankruptcy and we want to be careful to preserve that but it's an independent organization or it should be an independent organization giving us your best information and the numbers but i think we have work to do here and i'm eager that we get on with both of those problems what can we do for the now and what can we do to uncover what happened and how we got here for him to be honest with the retiree's on truly what's happened i think that is important part of this whole hearing that we do not do not want to lose sight of but the other part and i have to commend my from day one when i got involved with this issue i've had the utmost respect for the individuals are in this room and that is really my hat is off to you but it is truly what has inspired me to want to try to help as much as i can just one other question i know the chairman has outlined attentional remedy and i'm curious if any of you have any other thoughts or ideas on what else could be done to help tried to assist retirees in this situation and that's open to you know ok i believe the g m has the money and i think it's again just outrageous to think that g m is choosing to use the money they're drawing down  be able to use a very small part every month to do supplement as they have the other group so i think that remedy is very simple it's there it's available tomorrow you know plan terminations if it happens what would be the result i think there are a number of changes in the law that would be really helpful i think is exactly right that participants should attached to only relate to delinquent contributions they have to wait till bankruptcy when it's essentially too late to get a lien on a company for  underfunding that doesn't relate just like with contributions and really should be able to go in when a plan is seriously under funded and create a line before terminations and that would have really helped in this situation  know i've heard that not all of tarp funds have been expended one of the things that's upset me about the use of tarp funds is that it hasn't been focused on the real pain of real people  perhaps some tarp money could be used not only to help the delphi employees but there are other employees who also have because of the economic turndown suffered pension loss and maybe that's a possibility i also want to say that i think all the delphi employees who have lost benefits have a compelling story to tell but if you think about prioritizing the employees that are in the work or those who are already retired or very close to who are up against this fifty four thousand dollar annual limit which moves downward if you take a survivor benefits or your spouse which was downward if you start your pension a few years early they have i think the most compelling story to tell close to retirement or who are already retired so there's limited money to go around where i would focus it initially or people who are retired or very close to retirement and then start looking at subsidized early retirement benefits very different answers depending on who you're asking and what their interest is and one of the things which i think you might look at transferred money when i set up to the salary pension plan is that it was fully funded i spent some time trying to this situation continue and just to say that i think you know working with you i'm more optimistic after this hearing than i was before with trying to build some coalitions within congress to try to get some of this done in your personal willingness to help us  but this could be and would be for our local community when you talk about you know fifty plus millions of dollars ripple on throughout a very couple of concentrated areas in a while i think this very much would help stimulate our local economy so in the in the tarp money again you know i voted for tarp and you know i was here when things were happening and and voted for it and supported it but we have an opportunity i think to use some of that money now to help average families middle class families that we we are obligated so i want to i want to thank bruce and chalk in mariana nick for all coming down here and being so tenacious with me and with our staff is a very important issue and there's nothing more heartbreaking especially mr kilday represents michigan so he knows exactly what we've gone through in our area and there's nothing more heartbreaking than than promises not being kept and in watching families and in the gate would be locked and i was at so things have improved but we're not done yet and so we're going to just keep going so i thank you very much for you your help the staff on the committee on this as well so thank you tim thanks for your leadership we look forward to working with you and mr lee and your colleagues this time i'm going to turn to my friend the ranking member for any closing remarks that he has mr chairman i think this is wonderfully helpful hearing and gaining insight into the specific challenge that  many hourly and salaried workers in delphi have based upon what has occurred and really the wrong that has occurred and the information that has to be gained this is been remarkably helpful and providing that foundation of information but i think as thank the witnesses for doing a really really helping educate the panel and helping us learn not only about your situation but how we might address similar situations and prevent what i take away from th is that tens of thousands of people have taken an awful hit as a result we also know that there are two vehicles through which we could address try to fix this problem