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AFTER THE FINANCIAL CRISIS: 

ONGOING CHALLENGES FACING 

DELPHI RETIREES 

FIELD HEARING 

BEFORE THE

SUBCOMMITTEE ON 

OVERSIGHT AND INVESTIGATIONS 

OF THE

COMMITTEE ON FINANCIAL SERVICES 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED ELEVENTH CONGRESS 

SECOND SESSION 

JULY 13, 2010 

Printed for the use of the Committee on Financial Services 

Serial No. 111–143 

( 

(II) 

HOUSE COMMITTEE ON FINANCIAL SERVICES 

BARNEY FRANK, Massachusetts, Chairman 

PAUL E. KANJORSKI, Pennsylvania 

MAXINE WATERS, California 

CAROLYN B. MALONEY, New York 

LUIS V. GUTIERREZ, Illinois 

NYDIA M. VELA ́ ZQUEZ, New York 

MELVIN L. WATT, North Carolina 

GARY L. ACKERMAN, New York 

BRAD SHERMAN, California 

GREGORY W. MEEKS, New York 

DENNIS MOORE, Kansas 

MICHAEL E. CAPUANO, Massachusetts 

RUBE ́ N HINOJOSA, Texas 

WM. LACY CLAY, Missouri 

CAROLYN MCCARTHY, New York 

JOE BACA, California 

STEPHEN F. LYNCH, Massachusetts 

BRAD MILLER, North Carolina 

DAVID SCOTT, Georgia 

AL GREEN, Texas 

EMANUEL CLEAVER, Missouri 

MELISSA L. BEAN, Illinois 

GWEN MOORE, Wisconsin 

PAUL W. HODES, New Hampshire 

KEITH ELLISON, Minnesota 

RON KLEIN, Florida 

CHARLES WILSON, Ohio 

ED PERLMUTTER, Colorado 

JOE DONNELLY, Indiana 

BILL FOSTER, Illinois 

ANDRE ́ CARSON, Indiana 

JACKIE SPEIER, California 

TRAVIS CHILDERS, Mississippi 

WALT MINNICK, Idaho 

JOHN ADLER, New Jersey 

MARY JO KILROY, Ohio 

STEVE DRIEHAUS, Ohio 

SUZANNE KOSMAS, Florida 

ALAN GRAYSON, Florida 

JIM HIMES, Connecticut 

GARY PETERS, Michigan 

DAN MAFFEI, New York 

SPENCER BACHUS, Alabama 

MICHAEL N. CASTLE, Delaware 

PETER T. KING, New York 

EDWARD R. ROYCE, California 

FRANK D. LUCAS, Oklahoma 

RON PAUL, Texas 

DONALD A. MANZULLO, Illinois 

WALTER B. JONES, JR., North Carolina 

JUDY BIGGERT, Illinois 

GARY G. MILLER, California 

SHELLEY MOORE CAPITO, West Virginia 

JEB HENSARLING, Texas 

SCOTT GARRETT, New Jersey 

J. GRESHAM BARRETT, South Carolina 

JIM GERLACH, Pennsylvania 

RANDY NEUGEBAUER, Texas 

TOM PRICE, Georgia 

PATRICK T. MCHENRY, North Carolina 

JOHN CAMPBELL, California 

ADAM PUTNAM, Florida 

MICHELE BACHMANN, Minnesota 

KENNY MARCHANT, Texas 

THADDEUS G. McCOTTER, Michigan 

KEVIN McCARTHY, California 

BILL POSEY, Florida 

LYNN JENKINS, Kansas 

CHRISTOPHER LEE, New York 

ERIK PAULSEN, Minnesota 

LEONARD LANCE, New Jersey 

JEANNE M. ROSLANOWICK, Staff Director and Chief Counsel 

(III) 

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

DENNIS MOORE, Kansas, Chairman 

STEPHEN F. LYNCH, Massachusetts 

RON KLEIN, Florida 

JACKIE SPEIER, California 

GWEN MOORE, Wisconsin 

JOHN ADLER, New Jersey 

MARY JO KILROY, Ohio 

STEVE DRIEHAUS, Ohio 

ALAN GRAYSON, Florida 

JUDY BIGGERT, Illinois 

PATRICK T. MCHENRY, North Carolina 

RON PAUL, Texas 

MICHELE BACHMANN, Minnesota 

CHRISTOPHER LEE, New York 

ERIK PAULSEN, Minnesota 

(V) 

C O N T E N T S 

Page 

Hearing held on: 

July 13, 2010 ..................................................................................................... 1 

Appendix: 

July 13, 2010 ..................................................................................................... 33 

WITNESSES 

THURSDAY, JULY 13, 2010 

Akpadock, Frank, Ph.D, Senior Research Associate and Regional Scientist, 

Youngstown State University’s Center for Urban and Regional Studies ........ 24 

Dragojevic, Milan (Nick) Jr., Delphi hourly retiree .............................................. 20 

Fisher, Hon. Lee, Lieutenant Governor of Ohio .................................................... 8 

Frost, James, Vice Chair, Delphi Salaried Retiree Association (DSRA) ............. 16 

Gump, Bruce, Director, Warren Legislative Council, and Board Member, Delphi Salaried Retiree Association (DSRA) ........................................................... 14 

Hudzik, Mary Ann, Delphi salaried retiree ........................................................... 18 

Wernet, Norman, State Director, Ohio Alliance for Retired Americans ............. 22 

APPENDIX 

Prepared statements: 

Brown, Senator Sherrod ................................................................................... 34 

Donnelly, Hon. Joe ........................................................................................... 40 

Turner, Hon. Michael R. .................................................................................. 41 

Wilson, Hon. Charlie ........................................................................................ 44 

Akpadock, Frank .............................................................................................. 46 

Dragojevic, Milan (Nick) Jr. ............................................................................ 64 

Fisher, Hon. Lee ............................................................................................... 68 

Frost, James ...................................................................................................... 72 

Gump, Bruce ..................................................................................................... 74 

Hudzik, Mary Ann ............................................................................................ 77 

Wernet, Norman ............................................................................................... 79 

ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD

Moore, Hon. Dennis: 

Issue brief of the Alliance for Retired Americans, entitled, ‘‘Retiring Into 

Work,’’ dated July 2005 ................................................................................ 85 

Issue brief of the Alliance for Retired Americans, entitled, ‘‘Vanishing: 

Pensions and Savings,’’ dated September 2005 .......................................... 93 

Institute for Women’s Policy Research Fact Sheet entitled, ‘‘The Economic 

Security of Older Women and Men in Ohio,’’ dated January 2007 .......... 101 

Michigan Democratic Party, ‘‘Resolution in Support of Delphi Salaried 

Retirees,’’ adopted May 5, 2010 ................................................................... 105 

Ohio AFL–CIO, ‘‘Senate Concurrent Resolution 23’’ ..................................... 107 

Letter from Armond Budish, Speaker, Ohio House of Representatives, 

to President Barack Obama, dated January 27, 2010 ............................... 111 

‘‘Resolution 2010–9’’ ......................................................................................... 113 

Letter from Ted Strickland, Governor, State of Ohio, to President Barack 

Obama, dated September 14, 2009 .............................................................. 114 

Letter from Ted Strickland, Governor, State of Ohio, to Chairman Moore, 

Ranking Member Biggert, and members of the subcommittee, dated 

July 12, 2010 ................................................................................................. 116 

Page

VI 

Lee, Hon. Christopher: 

Series of letters to various parties regarding the Delphi situation .............. 117 

Wilson, Hon. Charlie: 

Written responses to questions submitted to Bruce Gump ........................... 153 

List of Delphi retirees who submitted testimonials (testimonials are contained in committee files) ............................................................................. 158 

(1) 

AFTER THE FINANCIAL CRISIS: 

ONGOING CHALLENGES FACING 

DELPHI RETIREES 

Thursday, July 13, 2010 

U.S. HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON OVERSIGHT

AND INVESTIGATIONS, 

COMMITTEE ON FINANCIAL SERVICES, 

Washington, D.C. 

The subcommittee met, pursuant to notice, in the Canfield High 

School Auditorium, 100 Cardinal Drive, Canfield, Ohio, Hon. Dennis Moore [chairman of the subcommittee] presiding. 

Members present: Representatives Moore and Lee. 

Also present: Representatives Wilson and Ryan. 

Chairman MOORE OF KANSAS. This field hearing of the Subcommittee on Oversight and Investigations of the House Financial 

Services Committee will come to order. Our hearing today is entitled, ‘‘After the Financial Crisis: Ongoing Challenges Facing Delphi 

Retires.’’ This is our 15th Oversight and Investigations hearing this 

Congress, and our 4th field hearing. 

Before we begin with today’s hearing, I want to take a moment 

of personal privilege to first thank Representative Charles Wilson 

for asking that we come to Ohio and focus on this important issue 

of Delphi workers and retirees and how they are doing following 

the recent financial crisis. Congress can learn much more about 

particular issues or challenges when we get out of Washington and 

hear directly from the people we represent, as we will today. 

I also want to thank the other Members who have traveled to be 

with us today: Representative Chris Lee of New York; and Representative Tim Ryan of Ohio. Finally, I want to thank the City of 

Canfield for welcoming us to Ohio, as well as Representative Wilson’s staff and others who made today’s field hearing possible. 

We’ll begin this hearing with Members’ opening statements up to 

10 minutes per side, and then we will hear testimony from our witnesses. For each witness panel, Members will each have up to 5 

minutes to question our witnesses. The Chair advises our witnesses 

to please keep your opening statements to 5 minutes to keep things 

moving so we can get to Members’ questions. Also, any unanswered 

questions can be followed up in writing for the record. 

Without objection, all Members’ opening statements will be made 

a part of the record. I now recognize myself for 2 minutes for an 

opening statement. 

2 

I don’t need to remind anyone that our country has been through 

the worst economic recession and financial crisis since the Great 

Depression and everyone knows, whether you’re a Democrat or Republican, that lax oversight and poor regulation of our financial 

system for too many years sowed the seeds of a near collapse of our 

entire economy. 

Who paid the price for these mistakes? Unfortunately, it was not 

Wall Street but our constituents on Main Street and the people 

from places like right here in Canfield, Ohio, who paid the price. 

American households lost about $14 trillion in net worth over the 

course of 2 years. Retirement accounts saw an over 20 percent decline in value, forcing many Americans to delay their retirement. 

Millions of Americans lost their homes through foreclosure. Ber- nie Madoff’s Ponzi scheme defrauded $65 million from investors. In 

response to all of this, the House responded by approving the DoddFrank Wall Street Reform Act which will end ‘‘too-big-to-fail,’’ end 

taxpayer bailouts, and put tough cops on the beat watching out for 

consumers and investors. I hope the Senate will act soon so these 

needed reforms become law. 

But this is not the end of the story. As if the financial crisis was 

not bad enough, the auto industry in our country has struggled in 

a major way this past decade, and as a result we have seen far too 

many bankruptcies, layoffs, and plants being closed. Representative 

Charlie Wilson invited our subcommittee to visit Ohio as he told 

me about the Delphi retirees we will hear from today and the challenges they have faced before, during, and after the financial crisis. 

I look forward to hearing from them, how the financial crisis has 

impacted them and their communities, and what particular issues 

with respect to pension plans and other challenges they continue 

to face. 

I now recognize my colleague, Representative Chris Lee, for as 

much time as he may consume, up to 10 minutes. Mr. Lee is a valued member of our Oversight Subcommittee who, like other Members present, has been very active on this Delphi issue we are discussing today. Mr. Lee? 

Mr. LEE. Thank you, Mr. Chairman, for convening this hearing 

today, and thank you, Congressman Wilson and Congressman 

Ryan, for requesting this field hearing and for your hard work on 

this issue which truly is near and dear to all of our hearts. This 

is something that early on in this Congress when this—we heard 

the plight of the Delphi workers. I think all of us around this table 

have gravitated towards, because it’s truly—it’s an issue of fairness, and the part that I have respected the most out of all of the 

retirees I have met since coming to this Congress is the fact that 

nobody’s looking for anything special. They’re looking for fairness, 

to be treated like all others have during the difficult economic time, 

and that’s really what has separated you and that’s really gravitated me to try to be a champion for this issue. 

The treatment of retirees is one of the less discussed aspects of 

the restructuring of the auto industry but one that needs our attention. We’re talking about close to 20,000 families who ultimately 

will be affected by this issue. Through no fault of their own, those 

who assumed that after working side-by-side with their fellow 

workers for 20, 25, 30 years and working hard, that they would 

3 

have something left at the end of the day, to have their life insurance, their health care, and now potentially their pensions cut 

drastically surely is not right. 

And the fact is after they have seen their pensions defaulted to 

the Pension Benefit Guaranty Corp, this is a direct result of the 

negotiation discussions between Delphi, GM, and the Treasury Department’s Task Force. Unfortunately, these discussions raised far 

more questions than answers about how and why these pensions 

were terminated, which is now having a lasting impact on, I assume, almost everybody in this room’s financial security. 

I welcome the committee’s willingness to conduct its congressional oversight and investigate this issue. I agree with the thousands of people around this country and those in this auditorium, 

retirees and their families who demand real action, not just talk, 

but real action. Delphi retirees and their families need help. They 

deserve action and an investigation into why this unfair and unjust 

decision was made. 

However, there’s little this committee can investigate without a 

witness here from the Treasury Department. That, to me, is the 

most unnerving situation to have people come here, we want to 

have an open discussion, and for the Treasury not to show up, to 

me, is incredibly frustrating and the fact that Delphi retirees deserve answers, all taxpayers deserve an answer. Dozens of Members of Congress have tried over the year to seek answers from the 

Treasury Department on behalf of Delphi workers, retirees, as well 

as the American taxpayers since they now own 60 percent of General Motors. However, we have received very little. On April 21, 

2010, I received a response from Ron Bloom, who was one of the 

acting chairs of the Auto Task Force. He sent the letter to me on 

April 21; it was a response to the letter I had sent to him on June 

5, 2009, nearly 10 months after the letter had been sent out. Unfortunately, this is not an isolated issue and, Mr. Chairman, I ask 

unanimous consent to have these letters submitted into the record. 

Chairman MOORE OF KANSAS. Without objection, they will be 

made a part of the record. 

Mr. LEE. Literally, here, I have over a dozen letters that were 

sent in the last year to the Administration, to the Treasury Department, to the Auto Task Force, to General Motors. How many responses did I get back? Very few, and I think that is wrong when 

we are here representing the American people and not to have sufficient answers on what truly is going on. 

Outside of that frustration, since a December 2009 Education 

and Labor Subcommittee hearing, new information has emerged 

that should focus the attention of this committee and indeed the 

entire Congress. One critical piece of evidence, according to a report prepared by the consulting firm of Watson Wyatt at the request of Delphi on September 30, 2009, the salaried pension plan 

was 85.62 percent funded, yet the average funded status of the 100 

largest pension plans in America was only 81.7 percent in 2009. 

This truly calls into question exactly why the Delphi salaried plan 

was considered severely underfunded and necessitating termination. 

Were there other motivations involved in the termination? It’s 

the answers to these questions that Democrats and Republicans 

4 

alike in Congress have been seeking for more than a year. On behalf of Delphi’s workers and retirees, and the American taxpayers 

who are financing General Motors recovery, I’m here today to seek 

the support of this committee to demand action and to urge the 

Treasury to correct this injustice and treat all Delphi workers and 

retirees fairly. 

This is not a Republican issue; it’s not a Democrat issue. This is 

not a union versus non-union; this is a fairness issue. Delphi workers deserve to be treated fairly. I would like to leave the committee 

with one thought expressed by the UAW president, Ron 

Gettlefinger. In January, he wrote, ‘‘We are advocating for the salaried retirees whose pensions have been eroded, though their dedication to the company and their years of service remain steady. No 

one should sit silently by and say nothing about the unfair and inequitable treatment these people are receiving. Such silence goes 

against the founding principles of our Union.’’ 

Mr. Gettlefinger is absolutely right, and for those reasons I, 

again, commend this committee for holding this hearing to try to 

reach the goals of fairness, transparency, and equity. Simply put, 

we want, and we deserve, answers. With that, I yield back. 

Chairman MOORE OF KANSAS. My thanks to Congressman Lee 

for his statement. I now ask unanimous consent that our colleagues, Representatives Charlie Wilson and Tim Ryan, participate 

in this subcommittee field hearing. Without objection, it is so ordered. I recognize Representative Charlie Wilson for 3 minutes for 

your opening statement. 

Mr. WILSON. Thank you, Mr. Chairman, and let me thank you 

formally for coming here to host this meeting for us today and welcome and thank you, Lieutenant Governor Fisher, for being here 

with us today and have testimony for all of us. I thank the Delphi 

retirees for being here and please know that we’re trying to help 

in any way we can. I would like to thank Dr. Akpadock for coming 

before our panel today to talk about how the situation has affected 

our community financially and I am pleased to have other Members of Congress, Congressman Tim Ryan and Congressman Chris 

Lee, both here with us today. Thank you for all your efforts on behalf of Delphi retirees. 

While I am pleased to have great panelists before us today, I am 

also submitting testimony for over 100 Delphi retirees who wanted 

to make sure that their official statements are placed in the record. 

And though they can’t be here with us today, I would like to thank 

Governor Strickland and Senator Brown for their continuous efforts 

and support on behalf of Delphi retirees. I’ll also be submitting 

statements from both of them for the record. 

First and foremost, we are here today to listen. My office has 

worked for many months to ensure that the Delphi retirees are listened to and that your plight is understood. I’m so pleased that 

we’re able to hold the Financial Services Committee field hearing 

right here in our own backyard and you can hear firsthand from 

the people who have been affected by what has happened. I believe 

this hearing will provide the necessary platform for Congress to examine more closely the benefits reductions the Delphi retirees have 

suffered. 

5 

We all know the histories of Delphi and General Motors are 

closely intertwined. GM made certain promises regarding pensions 

when Delphi was spun off into its own entity, and GM was there 

for Delphi when it filed for bankruptcy in 2005, assuming additional responsibility Delphi worker pensions and benefits, but when 

GM was forced into bankruptcy in 2009, times got tough for both 

companies. 

Promises made to some Delphi retirees were broken entirely, 

while benefits promised to others were reduced in order to remain 

afloat. GM asked for help from the Federal Government, and eventually they took TARP funds which were originally offered by the 

U.S. Treasury to banks that were in trouble, and that’s where the 

Financial Services Committee comes in. 

Our committee has oversight over all TARP funds, and since GM 

has received TARP funds we have a responsibility to look into how 

these funds were used. In this case, we are looking into why Delphi 

retirees were left out of the equation as GM tried to return to its 

financial solvency. 

What GM ultimately decided to do was to turn over Delphi pensions to the Pensions Benefit Guarantee Corporation, the PBGC. 

On July 31, 2009, just a year ago, the PBGC assumed responsibility for these pension plans resulting in sizeable cuts of up to 80 

percent of some members for thousands of hard-working Delphi retirees. 

All of these retirees, all of you here today worked hard and put 

in your time counting on what you had been promised in retirement. You worked hard for benefits that you saw crumble before 

your eyes. Having these promises broken is just unacceptable. Unfortunately, this is not the first time we have seen this in our 

Mahoning Valley nor is it in my district at large. The steel industry 

is a good example of the same type of horror story. 

Ladies and gentlemen, hard-working men and women across the 

valley and across the country have made their long-term retirement plans based on what they were promised by their companies. 

It is simple as that. They don’t make contingency plans for their 

company filing bankruptcy and they certainly don’t expect to be 

victimized because of poorly managed pension plans. They just go 

to work every day and expect to be compensated fairly and earn 

the retirement benefits that they were promised, and I think when 

those promises are broken, it’s up to Congress to make sure companies honor commitments to their employees. 

That is why I’m the co-sponsor of a new bill called the Protecting 

Employees and Retirees in Business Bankruptcies Act. This legislation reforms the Bankruptcy Code by making sure that employees 

and retirees are treated fairly in corporate reorganizations. It 

would also modify existing limits on the termination of curtailment 

of employee and retirement benefits. 

While this pending legislation could help some in the future, it 

does not solve our problem today. I look forward to hearing from 

each of you. I hope that today can be a constructive step towards 

resolving the unfair treatment of Delphi retirees. 

Thank you, and I yield back the balance of my time, Mr. Chairman. 

6 

Chairman MOORE OF KANSAS. Time has expired. Next, Representative Tim Ryan is recognized for 3 minutes. 

Mr. RYAN. Thank you, Mr. Chairman. I appreciate you coming to 

Ohio to help us make the case and continue to make the case for 

this important issue for many of our constituents. I would also like 

to thank Congressman Lee for getting up early and making the 

drive down. We appreciate that as well. Also Governor Strickland, 

Lieutenant Governor Fisher, Senator Brown, and Mike Turner 

from Dayton, as well, have been great advocates for this. 

Before I do my formal remarks, Mr. Chairman, I ask unanimous 

consent to submit some testimony for the record from someone who 

the committee was not able to accommodate—Elizabeth Knauff is 

the president of the IUE–CWA Local 717 retirees organization, 

wants to encourage us to take some action for the record. 

Chairman MOORE OF KANSAS. Without objection, it is so ordered. 

Mr. RYAN. Mr. Chairman, the outpouring of support you see here 

today is a true reflection of a terrible impact of the loss of pension 

and benefits caused by this bankruptcy. 

During the time the company was in bankruptcy, the various 

pension funds fell further and further behind on the balance required to meet their obligation. This was compounded by an aggressive push for early retirement by Delphi’s management to trim 

the workforce, and when Delphi terminated the pension plans and 

sent their obligations to the PBGC, they covered approximately 

700,000 workers and were underfunded. While the PBGC will pay 

retirees a percentage of their promised benefits, many retirees, 

many here today, will see substantial losses. The younger retirees 

were promised the largest early retirement benefits as a part of the 

buyout Delphi forced on them, and will see the largest cuts as 

many of those payments are not insured by the PBGC. 

Many retirees from Delphi 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 80 percent health care tax credit. 

Mr. Chairman, the direct impact is enormous. I have spoken with 

many retirees about how they will be able to afford their mortgages, their health care costs, their children’s education bills. These 

retirees and their families, quite frankly, have been devastated. 

They worked for years to earn these benefits and now they are 

gone. These are our brothers, our sisters, our baseball coaches, pillars of our community. 

But the impact does not stop with the direct losses. There are 

many retirees in my congressional district that the losses will flow 

to everyone in the region, and one of our families will testify to 

that today. So the people least responsible for the bankruptcy of a 

company like Delphi are, in the end, the ones who lose their jobs 

and pensions over it. The bankruptcy system must be reformed to 

give a higher creditor status to retirees, not the banks. 

Many of the creditors currently above retirees are in a position 

to make informed decision about the creditworthiness of borrowers 

and set rates accordingly. Retirees are in no position to make those 

kinds of decisions. Furthermore, we need to tighten ERISA and 

other pension protection laws to preserve promised benefits. H.R. 

1322, introduced by Congressman John Tierney, is a great example 

7 

of exactly what needs to be done to prevent more situations like 

Delphi’s, and what my region saw in the steel industry. 

An employee cannot possibly plan for unexpected cuts and promised benefits after the game has already been played. They cannot 

go back 25 years and invest more to cover the investment losses 

and mismanagement of their employer. Once again, we see systematic misalignment of who pays for other people’s risks, other people’s recklessness, and other people’s mistakes. 

But unfortunately, even if these steps are taken, it’s too late to 

help many of my constituents. While many GM workers and retirees will receive their full pension and assistance with their health 

care through the GM bankruptcy, I am extremely disappointed that 

the Obama Administration has not directly addressed the many 

Delphi retirees who need assistance for their pension and benefits. 

My disappointment was compounded when the Administration recently announced recess appointment of a director of the PBGC 

who has recused himself from Delphi decisions because of his previous involvement in the bankruptcy. This simply does not make 

sense to me to appoint someone to a position who is unable to address a major concern for the American citizens. 

I have urged the Administration on numerous occasions to provide assistance at every opportunity and have yet to see any accommodations. Mr. Chairman, I appreciate the committee allowing 

me to participate in today’s hearing. I look forward to the testimony of today’s witnesses. It is a problem when anyone in this 

country loses their pension no matter how, and today, we have a 

chance to better understand and hopefully, in the short term, address this problem. 

Chairman MOORE OF KANSAS. Thank you, Mr. Ryan. I’m pleased 

to introduce our first witness, Lieutenant Governor for the State of 

Ohio, the Honorable Lee Fisher. Lieutenant Governor Fisher’s career has spanned the private, public, and nonprofit sectors. In fact, 

Lieutenant Governor Fisher has more than 17 years of public service, serving as Ohio Attorney General, State Senator, and State 

Representative. He has also worked as a private attorney, public 

company board director, and as a law clerk for the U.S. 6th Circuit 

Court of Appeals. 

While Lieutenant Governor Fisher led the State’s economic development efforts as Director of the Department of Development in 

2007 and 2008, Site Selection Magazine awarded its prestigious 

Governor’s Cup to Ohio for both of those years. In 2008, the magazine recognized the Ohio Department of Development, under Fisher’s leadership, as the top economic development agency in the 

country for business expansion. 

I know Governor Strickland’s official duties prevented him from 

joining us this morning, but we’re glad to have you, sir, to represent the State of Ohio in today’s hearing. 

Without objection, Lieutenant Governor Fisher, your written 

statement will be made a part of the record. You have 5 minutes 

to provide an opening statement. 

8 

STATEMENT OF THE HONORABLE LEE FISHER, LIEUTENANT 

GOVERNOR OF OHIO 

Mr. FISHER. Good morning, Chairman Moore and Congressman 

Lee. Thank you very much for traveling here today and a special 

thanks to my two friends who have been tireless advocates for the 

men and women here today; Congressman Charlie Wilson and Congressman Tim Ryan have been two of the leading advocates of this 

issue and, in fact, along with Senator Brown, were the ones who 

brought this issue to the attention immediately of Governor Strickland and me, and both of you deserve very special credit for the 

fact that you have continued to make this a top priority for you and 

for the valley. 

As Chairman Moore said, Governor Strickland wanted very much 

to be here. This is an extremely high priority for him, but unfortunately he has a very sensitive situation he is dealing with today 

that prevents him from being here, but I’m pleased to be here as 

well. I think it’s fair to say that if we look out on the audience 

today, the men and women who are here, in many ways they represent the great recession that has been brought to our doorstep. 

In many ways this is ground zero for the effects of a recession, and 

if we were to write a book about it, I think the title would be, 

‘‘Through No Fault of Their Own.’’ 

These are people, as all four of you have already pointed out, 

who have worked hard. They played by the rules, they paid their 

bills on time. They have saved for their children’s education and 

now, without notice, I think it’s fair to say they have been evicted 

from the American dream. We owe it to them. We owe it not just 

to the men and women here today but to other men and women 

throughout the valley and even throughout this State who have 

been hurt through no fault of their own by this recession. 

So I’m here today to testify on behalf of more than 20,000 nonunion Delphi retirees and 100 workers represented by the International Union of Operating Engineers and the International 

Brotherhood of Electrical Workers. These employees, many from 

Northeast Ohio, have worked as secretaries, engineers, technicians, 

and salespeople, devoting in many cases as much as 4 decades to 

their company, General Motors. And now, the very people who 

helped build General Motors through their labor are losing the retirement that they earned over a lifetime of service. 

I also want to point out something that Congressman Lee mentioned. I think it is important to note that although many of the 

men and women who have been affected here today are not necessarily members of unions, the UAW and other unions, to their 

credit, have stood up for their brothers and sisters. That’s a story 

that ought to be told as well. You mentioned Ron Gettlefinger, and 

I would also mention Jim Graham and Dave Green, who have been 

tireless advocates as well for these men and women. Even though 

many would suggest that people look out for their own, that’s not 

the case. Certainly not in the valley. People look out for each other 

and not just for themselves. 

When Delphi spun off from General Motors, most had no choice 

but to go to work for this new company and to continue their careers, and now they’re being denied the full pension benefits that 

9 

their colleagues at General Motors receive, and I agree with the 

four of you that this is, in the end, an issue of fairness. 

This is forcing many families near to the poverty level. People 

who have been in the middle class and always felt that they had 

a chance to reach higher, and now, through no fault of their own, 

are wondering if they really are still in the middle class. These retirees will lose over $300,000 in pension payments, on average, and 

let’s make it clear, pension payments are not handouts. They are 

earned through years of hard work. 

Men and women like Louis Liguore, who was forced to leave GM/ 

Delphi after over 25 years of service during those years, Louis was 

even inducted into the General Motors Hall of Fame. He has been 

looking for work and has applied for well over 300 jobs but unfortunately, at 60 years old, it’s nearly impossible for him to find work, 

so now he and his wife are facing a monthly income close to the 

poverty level and faces what he calls a shattered future. 

Mary Ann Hudzik who is going to be sharing her story with you 

on the second panel, worked for 301⁄2 years, 22 of those years at 

GM; and she and her husband counted on the pension and the 

health benefits and the life insurance that they earned through 

years of hard work in accounting and in customer service. The loss 

in her benefits was something she could not, as you pointed out, 

Congressman Ryan, plan for or anticipate. She’s happy that her 

friends from General Motors are receiving the benefits. She’s not 

angry at them, but she can’t understand why she is not being 

treated fairly. 

I think it’s fair to say that we owe it to them and to all the retirees to take all possible steps to secure their pensions. So that’s why 

I join the four of you and Governor Strickland and Senator Brown 

and the UAW in encouraging the Administration to, in turn, encourage General Motors to do the right thing and to meet its obligations to the Delphi retirees. 

I would be remiss if I also didn’t say that the legislation introduced by Congressman Tim Ryan and Senator Sherrod Brown that 

would restore benefits to these retirees through available funds in 

the Troubled Asset Relief Program, I think, is a giant step forward, 

and I know that Congressman Wilson is a strong advocate of that. 

We should use these dollars that were available to the companies 

on Wall Street that were responsible, in large part, for this economic crisis, to help out the families here today on Main Street 

who have shouldered the burden through no fault of their own. 

Thank you, Mr. Chairman. 

[The prepared statement of Lieutenant Governor Fisher can be 

found on page 68 of the appendix.] 

Chairman MOORE OF KANSAS. Thank you, sir, for your testimony, 

and for joining us for this important hearing. I recognize myself for 

up to 5 minutes for questions. Lieutenant Governor Fisher, it 

seems that the financial crisis and economic recession that followed 

has made matters worse, not only for the auto industry, which was 

already struggling, but particularly for these Delphi retirees. You 

did address this, but do you have anything to add? To what degree 

do you believe the financial crisis has made matters worse for these 

Delphi retirees and others here in Ohio? 

10 

Mr. FISHER. I don’t think there’s any question that even if this 

had not occurred the men and women here today were already, in 

many cases, suffering and been hit hard by this recession. So this 

is one of those cases where we’re adding insult to injury. I think 

it’s also fair to point out that there is an economic loss to the valley, and you’re going to hear that very specifically this afternoon, 

so I won’t go into those statistics. But this is—every person in the 

valley, whether they know these men and women or not, they’re 

going to be adversely affected because this is going to affect the 

economy of Mahoning Valley. What happens to the Mahoning Valley affects Northeast Ohio. What happens to Northeast Ohio affects 

the entire State of Ohio. I don’t think it’s an exaggeration to say 

that 111⁄2 million people in this State, our population, can be affected by what has happened here today. 

Chairman MOORE OF KANSAS. Thank you. What is your response, 

sir, to the people who say that the auto industry made their own 

mistakes for a number of years, and so if they go bankrupt, and 

their workers lose their jobs and pensions, they’re only reaping 

what they sowed years ago? Is there something unique about this 

issue with Delphi retirees and their pension plan that warrants a 

closer look? 

Mr. FISHER. Mr. Chairman, first let me say that no one wants 

the government to own a company or own a large share of the company, but I believe that 20 years from now, one of the stories that 

will be written is that because this Administration decided to save 

General Motors, in many cases they saved manufacturing, and they 

have also, I believe, said that we’re not going to turn our backs on 

the men and women who with their brains and their backs and 

their hands have literally built the middle class; and now they’re 

facing the prospect of losing that middle-class retirement. 

I also think it’s fair to say that if there’s any State in the country, Mr. Chairman, that is an example of reinvention, it is here, 

and because of the work of Congressman Ryan and Congressman 

Wilson, Governor Strickland, Senator Brown, and others, we’re seeing the hopeful side right here at Lordstown, with the Chevy 

Cruze. 

We all live in two worlds. We live in the world of Mansfield and 

Twinsburg and Lorain where people feel like they have been evicted from the American dream, but we also live on the other side 

that seeing that when we don’t turn our back on the men and 

women who have worked for us, we can see great things like we’re 

seeing at Lordstown. So I would argue that this is the time to double down and invest in the auto workers and the auto industry, not 

to turn our backs. 

Chairman MOORE OF KANSAS. Thank you, sir. Would you please 

compare the actions the State of Ohio and the Federal Government 

have taken with respect to these Delphi workers; they have both 

taken actions. What further appropriate actions should Congress 

take, in your estimation? 

Mr. FISHER. Chairman Moore, I mentioned Congressman Ryan 

and Senator Brown’s bill. I also would, of course, mention Congressman Wilson’s bill, which I think, in a sense, is the fence at 

the top of the cliff. I had a law professor who once said to me, ‘‘It’s 

better to have a fence at the top of the cliff than to have an ambuVerDate Nov 24 2008 18:29 Nov 12, 2010 Jkt 061847 PO 00000 Frm 00016 Fmt 6633 Sfmt 6633 K:\DOCS\61847.TXT TERRIE
11 

lance below.’’ Today, we’re at the bottom of the cliff and we’re taking the ambulance to help these men and women, but Congressman 

Wilson’s legislation will be the fence at the top of the cliff so this 

doesn’t happen again. 

So if you take Congressman Ryan and Senator Brown’s legislation to help these men and women who have already fallen off the 

cliff and then you pass Congressman Wilson’s legislation to build 

a fence at the top so it never happens again, we have the ideal solution. 

Chairman MOORE OF KANSAS. Thank you, sir. My time has nearly expired. I’m going to recognize Representative Charlie Wilson at 

this time for 5 minutes, for questions. 

Mr. WILSON. Thank you, Mr. Chairman. One point that I really 

would like to get in, Lieutenant Governor Fisher, is that the effect, 

the catastrophic effect, that it would have had on Ohio had we not 

moved forward with the work with General Motors and Chrysler; 

and I have heard that it’s up to 100,000 jobs would have been affected in this State and would have just been catastrophic for our 

economy. Can you comment on that? 

Mr. FISHER. Yes, Congressman Wilson. Ohio is the third largest 

manufacturing State in the country. And one of the pillars of that 

manufacturing piece of our economy are those who worked directly 

and indirectly in the automobile industry, and that includes suppliers. Ohio is second in the Nation in the production of motor vehicles, second in the Nation. And we’re also the second largest State 

that has tier one suppliers in all of North America. 

So if you take all that, our current workforce in Ohio with regard 

to motor vehicle and automotive parts is well over 75,000 men and 

women. And so I think it’s fair to say that if we had not stepped 

in, or I should say, more importantly, if you had not stepped in, 

you and your colleagues, then the story we’re hearing today, it 

would have been multiplied by 75,000, and you wouldn’t have been 

able to have this hearing today at this high school. You would have 

had to do it at the stadium because you would have had 75,000 

people here today had you not and Congressman Ryan and others 

stepped forward to save General Motors. 

Mr. WILSON. Thank you, Lieutenant Governor. I’ll yield back the 

balance of my time so that others may ask questions. 

Chairman MOORE OF KANSAS. Next, I would like to recognize 

Representative Chris Lee for 5 minutes. 

Mr. LEE. Thank you, Mr. Chairman. And thank you, Lieutenant 

Governor, for lending your support here today on behalf of the primarily salaried retirees who, as you know and you pointed out, and 

we both mentioned the fact that UAW President Gettlefinger has 

been supportive, and I think that is key because he also recognizes 

the fact that the Treasury and the Auto Task Force had negotiated 

to ensure that UAW retirees did, in fact, get topped off on their 

pensions; and that’s why it boils down to fairness, and I think the 

frustration we all share for these retirees and the fact that they 

have been stonewalled in terms of getting answers or trying to find 

relief, and that’s why I do think it’s important that we do keep the 

heat up and this—because this is yet—this is a bipartisan issue. 

This affects all Americans, all hard-working Americans and these 

retirees surely need it. From your perspective, is there anything 

12 

that can be done from Ohio from a State level or from your office 

to help us apply the heat? 

Mr. FISHER. Yes. I don’t think there’s any doubt that, of course, 

many voices are always more effective than one voice, and so Governor Strickland and I have already joined the list that includes, 

of course, Congressman Wilson, Congressman Ryan, Senator 

Brown, the UAW, and so many others. And I think it’s fair to say 

that although we have been disappointed and frustrated, as you 

heard from Congressman Ryan, I think it’s also fair to say that 

hearings like this, I think, are a giant step forward in making sure 

that those people who can make the decisions here, especially when 

I think it’s fair to say it is bipartisan. 

Let’s be very frank here. I believe that this Administration has 

done great things to pull us back from the edge of the cliff. One 

of the best examples is what has happened with General Motors. 

But this isn’t a Democratic issue, and this isn’t a Republican issue, 

certainly not to the men and women here, and frankly not to any 

of us here either. So that when the Administration that I support 

makes mistakes, we have an obligation to point those mistakes out 

and to do everything we can to say to them that while we agree 

with your policies, in some cases, you need to do better. 

Mr. LEE. Thank you, Mr. Chairman. I yield back. 

Chairman MOORE OF KANSAS. Thank you, sir. Next, the Chair 

will recognize Congressman Ryan for 5 minutes. 

Mr. RYAN. Thank you, Mr. Chairman. I know, Lieutenant Governor, that you have been involved in the past 3 or 4 years in economic development and we have benefited from that and testimony 

coming after you will completely outline, in detail, as to what the 

economic impact is going to be, but I think it’s important for the 

Administration to hear this and others to hear this on the 

ground—$57 million of economic impact annually. Given your background in economic development, the department here in Ohio, 

how difficult is it to find any company to come into any community 

in Ohio and distribute $57 million every single year that you can, 

we thought, take to the bank with a consistent development within 

that community to buy cars, to buy homes, to buy—how difficult is 

it, you on the front lines in Ohio in the recession to get that kind 

of business to come to Ohio? 

Mr. FISHER. Congressman Ryan, the Governor and I, I believe, 

are the only Governor and Lieutenant Governor in the country who 

travel to Detroit 4 times a year to meet with the executives of all 

the big three major auto makers. We do that because we don’t 

think that just writing letters or making phone calls is enough. So 

over the last several years, both of us have been in Detroit many 

times, and when we’re meeting with GM or meeting with Ford, or 

meeting with Chrysler, we hear the same thing, and that is the 

competition is intense. We have won some battles and we have lost 

some. 

I believe, however, that because we have developed relationships 

and we have made it clear to them that this is our priority, good 

things have happened as well; and there is no better example, no 

better example not just in Ohio, there’s no better example in the 

United States of America than Lordstown, because of your work, 

Congressman Ryan, because of the work of Congressman Wilson 

13 

because of the work of Senator Brown, Governor Strickland, the 

UAW, the Mayor, team effort, bipartisan team effort, Lordstown in 

many ways has become the crown jewel for General Motors, and I 

have to tell you that almost every day we get calls from companies 

who tell us the following: We can pick up and move anywhere and 

we have States who want us all the time. 

Make no mistake about it that in this recession, saving a job is 

the same thing as creating a job, because the competition is so intense. And so when you not only save jobs but you add jobs, what 

you have done is something that the history books will say is remarkable and no one person deserves the credit. Everybody in this 

room, everybody in this valley but especially, of course, those of you 

who are elected to represent the valley do deserve the credit. 

And I can tell you that because of what we have done with 

Lordstown, now we not only have to protect it, but we also have 

to make sure the legacy is not besmirched and that there’s not a 

smudge on that legacy because of what happened here. Let’s make 

it a proud legacy that said we not only brought the Cruze and 

added a third shift, but that we looked at the men and women who 

were the backbone of the auto industry and we helped them as 

well. 

Mr. RYAN. Just to make the comment, here we have an opportunity, how difficult it is to go out to compete. Ohio is not competing with Pennsylvania anymore. Ohio is competing with India 

and China for this work, and to have on the table $57 million a 

year that can be kicked into this local economy here I think is absolutely significant, so we spent, all of us here, a lot of time, lot 

of resources going out, trying to get more companies here or expand 

the companies we have. 

That’s why I feel so strongly about this issue. We have an opportunity here, something that’s laying on the table. There are personal stories here, but there’s also an economic impact here, and 

I think we can focus on what would have a great stimulating effect 

on our local economy. With that, I thank you, Lieutenant Governor. 

Chairman MOORE OF KANSAS. Thank you, gentlemen, and thank 

you, Lieutenant Governor Fisher, for your public service and for 

your testimony. You, sir, are now excused. I’ll invite the second 

panel of witnesses to please take their seats. Thank you. 

Mr. FISHER. Thank you very much. 

[recess] 

Chairman MOORE OF KANSAS. I’m pleased to introduce our second witness panel, and the hearing will reconvene: Mr. Bruce 

Gump, director of Warren Legislative Council and board member, 

Delphi Salaried Retiree Association; Mr. James Frost, vice chair of 

DSRA and a constituent of Representative Lee; Ms. Mary Ann 

Hudzik, Delphi salaried retiree; Mr. Milan Dragojevic, Delphi hourly retiree; Mr. Norman Wernet, Ohio director, Alliance for Retired 

Americans; and Mr. Frank Akpadock, Ph.D., senior research associate and regional scientist for Youngstown State University. 

I welcome our witnesses who are testifying today. Without objection, your written statements will be made a part of the record. 

You will each have up to 5 minutes to summarize your statements 

and touch on the key messages you would like to share. Mr. Gump, 

sir, you are recognized for 5 minutes. 

14 

STATEMENT OF BRUCE GUMP, DIRECTOR, WARREN LEGISLATIVE COUNCIL, AND BOARD MEMBER, DELPHI SALARIED RETIREE ASSOCIATION (DSRA) 

Mr. GUMP. Good morning, Chairman Moore, and members of the 

subcommittee. We greatly appreciate the concern this subcommittee has expressed concerning this issue and hope we can 

offer some insight and ideas on ways to correct— 

Chairman MOORE OF KANSAS. Move your microphone a little 

closer, if you would, please. Thank you. 

Mr. GUMP. Can you hear me now? I’ll speak as clearly as I can. 

We greatly appreciate the concern this subcommittee has expressed 

concerning this issue and we hope we can offer insight and ideas 

on ways to correct what the Ohio Senate, the Speaker of the Ohio 

House of Representatives, the Ohio and Michigan Democratic Party 

Executive Committees, and numerous others have called unfair 

and inequitable. 

My name is Bruce Gump, as you recognize, and I worked for 

General Motors for 23 years and then Delphi for 10 more years as 

senior engineer before being involuntarily terminated and pension 

eligible. I’ll try to describe how the misconceptions and misunderstandings about our pension plan and other benefits and our connection to the economy of the United States led to decisions that 

have hurt not only the group I represent, but also other groups, 

and indeed the entire country. 

As we have stated in previous testimony offered in other committees in both the House and the Senate, we were assured by the 

company and the PBGC that our pension plans were being well 

cared for. The more than 20,000 salaried workers made up of secretaries, clerks, technicians, customer service representatives, accountants, cost estimators, engineers, and dozens of other classifications believed that we would receive appropriate protection for 

the promise deferred compensation that makes up a pension. 

However, as we have learned since the bankruptcy of Delphi and 

then General Motors, to executives of the company, and to the 

United States Treasury Auto Task Force, we were nothing but a 

commodity to be thrown out like yesterday’s trash. And so our government determined we did not have enough commercial value 

work or maybe political power to deserve any protection during the 

Treasury-orchestrated bankruptcy. 

The effect of this decision on our community was calculated by 

the Youngstown State University Department of Urban and Regional Studies. When the study is extended to include the other 

lost benefits for all the affected groups, both hourly and salary, the 

overall cost to the economy of the United States is about $1.6 billion per year every year for the next 20 or 30 years. In addition, 

because the economic activity is reduced so significantly, nearly 

85,000 American citizens who had nothing to do with the automotive industry will see their employment simply evaporate. 

When the Emergency Economic Stabilization Act of 2008 that 

created the Troubled Asset Relief Program, called TARP, was written, Congress wrote in Section 113, titled ‘‘Minimizing Negative 

Impact,’’ ‘‘The Secretary shall use the authority under this Act in 

a manner that will minimize any potential long-term negative impact on the taxpayer taking into account the overall economic beneVerDate Nov 24 2008 18:29 Nov 12, 2010 Jkt 061847 PO 00000 Frm 00020 Fmt 6633 Sfmt 6633 K:\DOCS\61847.TXT TERRIE
15 

fits of the program, including economic benefits due to improvements in economic activity and the availability of credit, the impact 

on savings and pensions of individuals, and reductions in losses to 

the Federal Government.’’ 

We respectfully submit that the Secretary of the Treasury did 

not do everything possible to meet this obligation. Consider that in 

just a short 10-year time horizon, $16 billion of economic activity 

will have been lost because the Delphi retirees did not receive the 

same benefit protection and support that other groups in the auto 

industry did. Each of those transactions represents income for 

somebody, and if taxed at 15 percent, the average tax that the IRS 

claims for people who owe tax liability, then the United States Government will not collect $2.4 billion and local governments will not 

collect another $960 million in sales taxes calculated using an average 6 percent rate. 

This does not include the increased cost to the United States 

Government for programs such as unemployment compensation, retraining, and numerous other programs. Nor does it include the 

devastating long-term costs of personal bankruptcies and home 

foreclosures, many of which have already happened, along with 

family breakups, and even suicides. 

The Delphi retirees number around 70,000 people. In general, 

each will have spouse, children, brothers, sisters, perhaps grandchildren plus friends and neighbors. The old marketing saw about 

each dissatisfied customer affecting several other potential purchasing decisions implies that three quarters of a million to maybe 

even a million purchasing decisions will be affected by the Delphi 

retirees. 

If the goal of the Treasury and their unprecedented involvement 

in the GM bankruptcy was to rescue that company and make them 

able to survive well into the future, it would seem appropriate to 

try to hold onto loyal customers like the Delphi/GM retirees. Instead, they incorrectly determined that our group had no commercial value to General Motors and so deserves no support or protection from the United States Government. 

And so as a result of the discriminatory decision by the United 

States Treasury to fully fund pensions and benefits for one group 

while leaving other groups out, economic activity has been significantly reduced. There is a strong negative impact on savings and 

pensions of thousands of individuals, and the Federal Government 

will see significantly more losses than they would otherwise. 

To me, that’s obviously not living up to the requirements of the 

TARP, and it’s a policy error that simply must be corrected. Furthermore, and maybe even more importantly, there are the intangible effects of the decision on the country. This decision was immoral because it was unfair and inequitable. Just imagine what 

would happen if the United States Government was allowed to determine the fate of citizens or citizen groups based on perceived 

commercial necessity. Think of anything else government does like 

Social Security, military, and now even health care. That certainly 

goes against the very foundational principles of our country like 

equal protection. 

The decision is also unethical because it affects so many downstream of us in the economy, people who had nothing to do with 

16 

the industry or the decision and had no way to protect themselves. 

We believe it may even be illegal, and we’re pursuing that issue in 

the Eastern District of Michigan. It certainly destroys the credibility of the Administration when the President himself said it was 

necessary to protect the auto workers, and his party published a 

platform saying they would protect pension plans. It causes commercial value and political influence to reign supreme over the 

United States Constitution. Only those with enough political power 

and enough commercial necessity will receive any benefit from the 

involvement of the United States Government. In the written testimony, we provide thoughts on best ways to resolve and correct the 

situation. Numerous pathways are open, but only one needs to be 

followed. 

The bottom line is that we believe the United States Government 

has a responsibility to follow both the letter and the spirit of the 

United States Constitution to determine how they will interface 

with the citizens of this country, not commercial necessity. 

That concept is simply abhorrent in American political history. 

The Secretary of the Treasury must be held accountable to requirements of TARP and not allowed to discriminate between citizen 

groups. Thank you. 

[The prepared statement of Mr. Gump can be found on page 74 

of the appendix.] 

Chairman MOORE OF KANSAS. Thank you, sir. Mr. Frost, you are 

recognized for up to 5 minutes. 

STATEMENT OF JAMES FROST, VICE CHAIR, DELPHI 

SALARIED RETIREE ASSOCIATION (DSRA) 

Mr. FROST. Chairman Moore, and distinguished members of the 

subcommittee, thank you for the invitation to testify at today’s 

hearing. I’m representing 20,000 current and future Delphi salaried retiree employees and 70,000 union salaried retirees across 

this great country. 

As a salaried retiree who worked for Delphi and its predecessor 

General Motors for 31 years, events of the last 18 months have 

been devastating to me, my family, my community, and many other 

Delphi retirees. It has forced large numbers of us into an 

unsustainable economic situation at a time in our lives when recovery is difficult or, in some cases, impossible. What is even more disturbing is that as we dig into the details of how this all happened, 

as we have taken the PBGC to court, we see the hand of the Federal Government deciding the fate of our pensions for the benefit 

of others. Uniqueness of the GM bankruptcy and the Treasury’s 

role in determination of the Delphi Salary Pension Plan, coupled 

with the loss of all health and life insurance, is a reason Delphi 

salaried retirees are urging Congress to take a close look at this 

blatant disregard for law. 

Intervention in the fate of Delphi pensions by the U.S. Treasury, 

GM, and the presidentially-appointed Auto Task Force ventured 

well outside the bankruptcy and labor law to the great detriment 

of Delphi retirees. Public and non-public documents clearly show 

that the salaried Delphi pension plan was terminated by the PBGC 

upon the urging of the members of the Auto Task Force working 

to expedite the GM bankruptcy. 

17 

Time was of the essence, and they could not take a chance that 

the matter would languish in a contested court termination proceeding. In sworn depositions, key members of the Auto Task Force 

freely admitted that the route taken to terminate the Delphi pension plans was crafted to avoid due process afforded to holders of 

vested benefits under Sections 1113 and 1114 of the Bankruptcy 

Code. 

I had the opportunity to chair the 1114 committee as we were 

trying to get money from Delphi for health care, and we were successful, but I know what that process is all about and we were 

helpless. 

Now that our pension plan has been terminated, many retirees 

have seen pension reductions in excess of 40 percent less than 

what they had earned. In my case, personally, I lost in excess of 

30 percent of my already modest pension. I have a son who’s still 

in college, and with the added cost of replacing health care and life 

insurance, my net disposable income has been cut to about half of 

what it was 18 months ago. 

While the PBGC has given various and sometimes contradictory 

reasons for rapidly terminating Delphi’s salaried pension plan, the 

most often stated reason is inability to pay benefits due to severe 

underfunding. The PBGC has stated that they consider the plan to 

be funded at just below 50 percent of outstanding liabilities; however, actuarial experts disagree with that assessment. An independent actuarial report by Watson Wyatt, as Representative Chris 

Lee mentioned, after determining 4 weeks before the action to terminate pension plans showed planned funding at at least 86 percent of its liabilities, based on generally accepted accounting methods prescribed by ERISA. A second actuary confirmed the accuracy 

of the Watson Wyatt estimates and further observed that the funding status of the Delphi salaried plan was at or above the largest 

100 viable pension plans in this country. In other words, there was 

no funding crisis as the PBGC claimed as their reason for swift termination. 

Since time is extremely limited in today’s hearing, I can’t walk 

you through volumes of testimony and evidence that we have pored 

through that verifies the abuses of bankruptcy and labor laws that 

allowed the PBGC and the U.S. Treasury to get away with this 

government taking of our pension, but I would like to briefly paraphrase testimony of Harry Wilson and Matthew Feldman of the 

Auto Task Force as they discussed how they crafted and executed 

the termination and subsequent disparate treatment of the various 

Delphi pension plans. 

When questioned about the disparate treatment of different 

groups, Mr. Wilson admitted that certain groups of retirees were 

more politically sensitive than others, leading to the decision of 

whether or not they would be compensated by payments from GM 

and funded by the U.S. Treasury. The salaried retirees and nonUAW represented hourly retirees were obviously not considered politically worthy. UAW President Ron Gettlefinger wrote a letter on 

our behalf, saying that this was morally wrong, and asked the Federal Government to make it right. 

When asked about the termination of the Delphi pension plan, 

Matthew Feldman confirmed that one of his primary tasks was to 

18 

resolve the Delphi pension plan disposition so that GM could exit 

bankruptcy rapidly. He made it no secret that he never considered 

any other scenario than termination of the salaried plan and moving the hourly plan intact to GM. When that scenario failed, Plan 

B was to terminate all plans but then have GM make up the loss 

for UAW-represented retirees in a separate payment. This was a 

clever work-around for the prohibition against successor plans established after a pension plan has been terminated and trusteed to 

the PBGC. 

In closing, I would like to leave you with a few thoughts. First 

of all, the men and women in this audience today have donated 

whatever money they have left to helping us continue to push the 

PBGC and the Treasury in the court of law, so I give credit to 

these people here who are continuing to try to do whatever they 

can to fight this. There is irrefutable evidence that the Delphi salaried pension plan was a viable plan that was terminated by political appointees for the benefit of General Motors and the Treasury. 

In the process, evidence shows that significant violations of constitutional and statutory law occurred as the Federal Government 

picked winners and losers. These violations of the law have imposed serious economic and personal harm upon innocent Americans whose only sin was being in the wrong group at the wrong 

time. In the words of Edmund Burke, ‘‘All that is required for evil 

to prevail is for good men to do nothing.’’ I refuse to do that. That 

is why I continue to fight this injustice and I ask you to join me 

in that fight. Thank you for caring. Thank you for listening. We 

need your help and, as Chris Lee mentioned, we need action now. 

[The prepared statement of Mr. Frost can be found on page 72 

of the appendix.] 

Chairman MOORE OF KANSAS. Thank you, sir. Ms. Hudzik, you 

are recognized now for up to 5 minutes. 

STATEMENT OF MARY ANN HUDZIK, DELPHI SALARIED 

RETIREE 

Ms. HUDZIK. Good morning, Chairman Moore, and other members of the subcommittee. Thank you for inviting me here today to 

testify about the Delphi salaried pension loss impact. My name is 

Mary Ann Hudzik. I retired from Delphi in 2008 after 301⁄2 years 

of service; 22 of those as a GM employee being involuntarily terminated and pension eligible. I worked 11 years in accounting, 19 

years in sales, and a short time in customer service. 

I retired believing that I would have health care, life insurance, 

and a pension for the rest of my life, which were part of my overall 

compensation package, and because even in bankruptcy, we were 

assured our pensions were securely funded. 

Not long before I retired, I was presented with an excellence in 

action award for, ‘‘Providing valuable leadership and increasing 

Delphi’s overall cash flow by being instrumental in reducing the 

unbilled sales by approximately $3 million.’’ Shortly after retiring, 

it was decided that I, and those like me, had no commercial value, 

so I lost all earned post-employment benefits including my pension, 

which, after the PBGC takeover was reduced by 40 percent. So my 

dedication and years of loyal service to both GM and Delphi were 

irrelevant to those companies, but worse, irrelevant to our own govVerDate Nov 24 2008 18:29 Nov 12, 2010 Jkt 061847 PO 00000 Frm 00024 Fmt 6633 Sfmt 6633 K:\DOCS\61847.TXT TERRIE
19 

ernment who agreed that I had no commercial value and therefore 

was not entitled to my full pension, while friends who were in the 

union working for the same company were entitled to theirs utilizing TARP funds. 

I’m not unhappy for my friends; I’m only perplexed at why we 

were treated so differently, and what will be done about it. I will 

tell you how this injustice has affected me personally. My husband 

is self-employed and therefore on my benefits. He is a chronic pain 

patient. Often, he cannot sleep due to the pain, and he sits up all 

night, leaving for work having never even gone to bed or sometimes 

not even being able to go to work. 

As anyone who is self-employed knows, no work equals no pay. 

He has endured many nerve blocks as well as surgery and still he 

suffers. Additionally, due to multiple chemical allergies, I myself 

must seek out specialists for things like dental treatments because 

anything that’s used on me must be custom designed and appropriately applied. The cost associated for these things are 3 times 

higher and not always covered by insurance. 

My pension reduction, along with the added cost of our lost 

health care and life insurance, were not something we anticipated. 

Our hope was that at least one of us would have a livable pension 

and other needed benefits. There are far worse situations within 

our retiree ranks and Delphi is not the only story of pension and 

benefit loss in this Mahoning Valley and throughout this country. 

My father and grandfather were steel workers. I know the heartache that came with the doors to those plants closing. It is inhumane, in my opinion, to rip away pensions when people are least 

able to replace the income. Work a Senior Fair and you will hear 

one story after another of widows living on $50 a month pensions. 

The story here, though, is that the U.S. Government stepped into 

a private sector bankruptcy and decided, with taxpayer dollars, 

who should be hurt and who should not. 

If you were politically strong and powerful, as one committee director actually told me, you were taken care of. I am personally 

outraged by this treatment, that we have to fund an expensive lawsuit on reduced income in the hopes of justice, an expensive process, while our opponents have deep pockets thanks to taxpayer dollars. How demoralizing to essentially be used to help line the pockets of CEOs and then to be, in effect, discriminated against by our 

own government—$8 million awarded for a health care VEBA 

which retirees had to fight for in court at their own expense which 

amounts to roughly $300 per retiree over their lifetime, while a 

handful of GM execs will get millions in stock and compensation 

packages while shedding selected baggage. How shameful, really. 

We have plenty of pent-up demand for GM cars within our retiree 

ranks, but loyalty works both ways. Our treatment should be a 

wakeup call to all salaried workers in this country, including those 

at GM. 

I agree with the President when he says, ‘‘We face a deficit of 

trust. We need to do our work openly. People have lost faith in 

their government.’’ Almost 100 Congressmen and Senators have repeatedly voiced their concern about and support for us. We have 

had House and Senate H.E.L.P. committee hearings, support from 

governors, attorneys general, State representatives, and union and 

20 

community leaders for over a year now and still no response from 

this Administration. 

Dr. Ed Montgomery, the President’s former Auto Czar visited 

with us and was presented with the Youngstown State University 

(YSU) economic impact study, which incidentally YSU did gratus, 

and I thank you, Doctor, for that. We presented it to Dr. Montgomery, and he assured us he himself would take it back to the 

President. That was a year ago. Thousands of letters written, emails, phone calls, volunteers devoting hundreds of thousands of 

hours to this pursuit of justice when many of us now need to be 

working instead to make up for the losses, pleading for someone to 

listen to our voices and yet silence from those who can right this 

wrong. 

We are present today for our 3rd hearing in 9 months. My hope 

is that enough has been heard to move towards a resolution or to 

quote the President, ‘‘I’m not interested in words; I’m interested in 

action.’’ The 2008 Democratic National Platform, page 13 says, ‘‘We 

will make it a priority to secure for hard-working families the part 

of the American dream that includes a secure and healthy retirement. We will adopt measures to preserve and protect existing public and private pension plans.’’ 

Once this government, my government, stepped into the GM/Delphi bankruptcy, all impacted retirees should have been dealt with 

fairly and equitably. We did nothing to deserve to be robbed of our 

dreams, our hopes, and our plans for a secure future, and to be 

sent into a downward spiral of existence while protecting the favored. Mr. Chairman, I sincerely request that this be the hearing 

to end all hearings, and that you move quickly to facilitate a resolution discussion between Treasury, PBGC, GM, and DSRA. It is 

well past time for all affected parties, hourly and salaried, to be 

treated fairly, and I thank you, sir. 

[The prepared statement of Ms. Hudzik can be found on page 77 

of the appendix.] 

Chairman MOORE OF KANSAS. Thank you. Mr. Dragojevic, you 

are recognized, sir, for 5 minutes. 

STATEMENT OF MILAN (NICK) DRAGOJEVIC Jr., DELPHI 

HOURLY RETIREE 

Mr. DRAGOJEVIC. Good morning, Chairman Moore, Congressman 

Lee, and members of the subcommittee. Welcome to the Mahoning 

Valley, what we consider the real heartbeat of America. Thank you 

for this opportunity that allows me a chance to voice my concerns 

regarding the issues facing IUE, CWA, and GM Delphi retirees. My 

name is my Milan Dragojevic, Jr. I retired as an IUE–CWA hourly 

retiree after 34-plus years of service, of that, 27 years as a GM employee. 

Many of us were enticed into retirement at an early age because 

of assurances given to us by GM to maintain our earned and promised benefits. Many people are not aware of the fact that not all 

GM Delphi IUE–CWA retirees were treated the same. Let me explain those differences. 

Those employees who retired prior to spin-off in 1999 are what 

we refer to as ‘‘GM retirees,’’ due to the simple fact that they never 

worked a day of their lives for Delphi, strictly General Motors. So 

21 

when the dust cleared after the bankruptcy, although this group’s 

pensions remain intact, their health care had changed dramatically. They were now to receive what is referred to as a catastrophic health care plan, and since their pensions were not reduced, they had few, if any, other health care options. 

The next group of retirees are Medicare eligible, people 65 and 

over. This group was now required to purchase a supplemental 

plan to suit their individual needs, where previously these additional costs were assumed through their health care plans. For 

many of these folks who never had to look for or select a plan, this 

was difficult and traumatic, to say the least. 

And the last group, which I am part of and I know firsthand, are 

the post-spin-off employees. Our pensions were turned over to the 

PBGC. My pension, if I live on just the PBGC supplement, will be 

reduced by 50 percent. But since PBGC had taken control of my 

pension, we were able to qualify for the health care tax credit 

known as the HCTC subsidy to help pay for our health care costs 

and some of us were able to search and find an additional plan. 

Let me give you an example of the changing coverage I experienced if I remained with the catastrophic plan. In 2006, I received 

an ICD, an implanted cardiac defibrillator. When it was originally 

placed into my chest, there was no copay for me, and no out-ofpocket expenses. Today, just to replace the battery, it will cost me 

$8,000 out-of-pocket. This is just one example. All retirees simply 

want is their earned and promised benefits, nothing more. For 

some retirees, decisions must be made whether to take medication 

or use those funds to pay utility bills or other homeowner expenses. 

Others allow medical problems to go untreated as they simply 

cannot afford to get sick. As one retiree stated, we used to be afraid 

of dying, now we’re afraid to live. The changes to our health care 

plan have tremendously increased the amount of disposable income 

used simply for health-related expenses. I have been able to return 

to the workforce to offset some of these increases while others have 

not. The increases we must sustain are the premium out-of-pocket 

expenses and copay. 

Lastly, retirees would simply like to know, how did this happen? 

Are there not ERISA laws in place to prevent this very thing? Who 

was involved in negotiations and what were their roles in determining what was fair? H.R. 3455, introduced by Congressman 

Ryan, and legislation introduced by Senator Brown, will help pay 

health care premiums for all GM/Delphi retirees, and H.R. 1322, 

proposed by Congressman Tierney, will protect future retirees’ 

earned and promised benefits. 

As Chairman Andrews stated at the House subcommittee hearing this past December in Washington, D.C., workers need to have 

secured creditor status and move to the head of the line in all 

bankruptcy legislation. And lastly, the HCTC subsidy that is due 

to default to a higher rate at year’s end needs to be continued at 

the present rate. 

Retirees simply want their earned and promised benefits and ask 

your help in making them whole, as anything short of this should 

be considered unacceptable. 

22 

Thank you for this opportunity to speak. I would welcome any 

and all questions either later today or in the future. I am willing 

to return to Washington, D.C., to discuss these issues, if needed. 

I would also like to thank Chairman Frank for allowing this 

hearing to take place here in our valley. Also, I would like to thank 

Congressman Wilson and the rest of the Ohio congressional delegation for working so diligently on these issues and making this hearing here in this valley a reality. Thank you. 

[The prepared statement of Mr. Dragojevic can be found on page 

64 of the appendix.] 

Chairman MOORE OF KANSAS. Thank you. Mr. Wernet, you are 

recognized for 5 minutes. 

STATEMENT OF NORMAN WERNET, STATE DIRECTOR, OHIO 

ALLIANCE FOR RETIRED AMERICANS 

Mr. WERNET. Thank you, Chairman Moore, Representative Lee, 

Representative Wilson, and Representative Ryan for allowing us to 

appear. My name is Norman Wernet, and I’m here before you as 

the State director and field organizer for the Alliance for Retired 

Americans, and on behalf of our Community Advocacy Network in 

this area, the Alliance for Senior Action here in the valley. The Alliance has more than 250,000 members, consisting of union retirees 

and other activists here in Ohio dedicated to improving the quality 

of life for older Americans. 

I appreciate the opportunity to testify about retirement income 

security in Ohio. My purpose for appearing is as a showing of solidarity with retirees of Delphi in their fight for fairness and equitable treatment and to highlight the ongoing pervasive weakening 

of retirement income security. 

The auto industry’s employment in Ohio has been cut by half 

since 2001. Ten percent unemployment has forced many to retire 

and tap their pensions to have a source of income. The workforce 

retiring now has been through the decade of 1970’s stagflation, 

wage price freezes, income restructuring, downsizing, and periods 

of unemployment to control inflation. It’s also this generation who 

spent enough to bring us out of the last couple of recessions. 

These workers limited pay demands and gave concessions and 

found ways to work and assist their employers to stay in business. 

The payoff is in essence, to have that life of work devalued in retirement. 

The Delphi workers fighting for full pension or at least top off 

of the reduced pension from PBGC are asking for some measure of 

economic justice for the compensation they have earned through a 

life of work. To allow those who managed this company into bankruptcy to walk away with millions of dollars at the expense of retirees; it’s not just an injustice. It’s a weakening of economic structure, as some folks have already testified to today. The Youngstown State University study shows $58 million a year 

in economic losses are suffered right here in this valley. That structural weakening has played out across all of the Ohio economy and 

has been continued time and again over the last 30-plus years. The 

fiscal crisis caused by the manipulation of financial markets has diminished savings of retirees of Delphi and all Ohio retirees and 

workers. 

23 

The situation argues for strengthening the financial regulations 

which you have been starting to do in Congress, and we appreciate 

that. But citizens’ personal savings, pensions, and Social Security 

need to be strengthened. Over the last 3 decades, we have seen a 

continued weakening of those three legs of retirement income. 

Those at greatest risk of outliving their retirement are women. 

A study by the Institute for Women’s Policy Research showed median personal income for women in Ohio over 65 years of age was 

$12,321. I had a call this past week from a woman who is 82. She’s 

a retiree from this valley, and worked for GE. She was asking, are 

there more supplements, is there a way that I can help find—is 

there something I have missed in my retirement so that I can 

make up the difference. I need to pay for my supplemental Medicare insurance. She wants to do the right thing. She wants to do 

the American thing and pay for it herself but her income is so low 

she cannot pay for the currently available supplemental insurance 

because her pension was reduced by a bankruptcy. 

Retirees have been left frustrated, and we have heard a lot of 

that frustration today. Let me give you a couple of headlines from 

the weekend: ‘‘Many sectors sustain while Wall Street is hiring.’’ 

‘‘Repairing Social Security may cause fiscal pain.’’ 

What can Congress do? Immediately, Congress can support the 

mechanisms that would make Delphi retirees whole. Topoffs might 

be a way to do that. Congress can pass H.R. 4677 and its companion S. 3033, the Protecting Employees and Retirees Act, and we 

thank you, Congressman Wilson and Ryan, for supporting that legislation and cosponsoring it. Immediately, Congress can support 

Social Security by raising the payroll tax cap on the wealthiest 

Americans. Freezing the estate tax at 2009 levels so that those revenues will go to Social Security and putting Americans back to 

work in American jobs, good-paying jobs. 

Immediately, Congress could enact S. 2927 or H.R. 4191, a modest tax on speculative investments by Wall Street, a .25 percent tax 

that would raise $75 billion a year. 

Congress could allow shareholders a greater voice in corporate 

governance to reign in some of the executive excesses and engage 

a better conversation and dialogue about American business practices. Building trust might actually build investment. 

Congress, in the long term, could adopt into law the principles 

of the retirement income security of the Retirement USA Conference: universal coverage; secure retirement; and adequate income and principles and specifics as adopted by the AFL–CIO. 

To you, Chairman Moore, Congressman Lee, Congressman Wilson, and Congressman Ryan, we appreciate the time that we have 

had here on behalf of the 250,000 members of the Ohio Alliance 

and Delphi workers. I want to thank you for the opportunity today 

to testify. Americans who played by the rules during their working 

lives should be able to live out their retirement with security and 

dignity. Thank you. 

[The prepared statement of Mr. Wernet can be found on page 79 

of the appendix.] 

Chairman MOORE OF KANSAS. Thank you, sir, for your testimony. 

Next, the Chair will recognize Dr. Akpadock for 5 minutes, sir. 

24 

STATEMENT OF FRANK AKPADOCK, PH.D, SENIOR RESEARCH 

ASSOCIATE AND REGIONAL SCIENTIST, YOUNGSTOWN 

STATE UNIVERSITY’S CENTER FOR URBAN AND REGIONAL 

STUDIES 

Mr. AKPADOCK. Chairman Moore, and Representatives Wilson, 

Ryan, and Lee, thank you for inviting me to share with you how 

the impending pension and health care reductions by Delphi Packard Electric Systems will impact the social and economic lives of 

its retirees from the Mahoning Valley, Ohio, in particular, and the 

Mahoning Valley’s economy in general. My name is Frank 

Akpadock, Ph.D., and I am a senior research associate and regional 

scientist at the center for Urban and Regional Studies. I have been 

there for over 18 years, mainly conducting pure and applied economic development research, not only here in the valley, but also 

in Northeast Ohio, in the Midwest, and in the Nation. 

When I was asked to testify, I was asked to make a few statements regarding the Mahoning Valley economy. I will start with 

population. Population in 2000 in Mahoning County was 257,560. 

In Trumbull County, it was 225,114, for a combined total of 

482,674 people. And in 2009, the estimate for both counties came 

out to 446,892 people, giving us a loss of 35,782 or 7.4 percent. The 

household income in 2008 the median for Mahoning and Trumbull 

Counties, was $40,508 and $41,409 respectively, compared to the 

State of Ohio median household income of $48,011. Poverty in 2008 

in the valley in Mahoning and Trumbull Counties was respectively 

17 percent and 16 percent compared to the State’s percentage of 13 

percent. 

The shipments in 2002, manufacturer’s shipments in Mahoning 

Valley total $11.1 million. And for the same period, wholesale trade 

sales was $3.3 billion and $4.5 billion. 

The house foreclosures in 2008 were 1,489 in Mahoning County 

and 936 in Trumbull County. 

Unemployment: In May 2010, Mahoning County had a labor 

force of 116,300, out of which 103,000 were employed, for an unemployment rate of about 11.4 percent; while the City of Youngstown 

recorded an unemployment rate of 13.3 percent. Also, Trumbull 

County had a total unemployment rate of 11.9 percent. Unemployment rates from these counties exceeded the national rate of nearly 

10 percent. 

Now, when I was asked to come—I just want to give you—of my 

conducting this so I really was not a fly by night. You do this economic regarding the retirees, salary retirees, I have had a ton of 

experience conducting this, so I could refer you to my resume or my 

vitae 1999 when I conducted a study I did at the request of the 

Congressman. The Youngstown Municipal Airport was about to be 

shut down because they felt it was not giving any financial impact, 

so I went and found that annually brought in about $11 million, 

and so it brought about the unification of the Mahoning County 

and Trumbull County initial to call, and if you will, that the impact 

study that I conducted we would not be having all these other people coming. 

I did set economic about Youngstown for familiar references. And 

it was at that time that wanted to close airports initial one so 

wanted to find out if air reserve Vienna was viable initial to the 

25 

airport. So I did that report and it was found out it was very viable 

and that base is still doing very well today, and I been doing a lot 

of jobs for the Nation. 

A study I did at Youngstown State level where the initial in Columbus wanted to trip down the public financial support for public 

investors to show that not only does public university have admission in the State contribute to development. 

And last is the one I did for President Sweet, when they asked 

me to conduct economic impact for Mahoning and Trumbull County 

about the $50 million earmarked for the construction of the school 

of business. So I did that, in other words, trying to prove that when 

I—the result I can see the study is not something (inaudible) even 

though I’m a part of it, I understand, but I am just an outsider 

looking in. 

I have no part to play. So what comes out is true (inaudible) 

what I would like. 

Chairman MOORE OF KANSAS. Your testimony— 

Mr. AKPADOCK. What I did two sections pre and post that pre 

what the retirees would obtain in terms of salary retirements and 

after the PBGC before the retirement they were head to $43.2 million and after retirement—I mean, after the takeover, it’s only entrance $6.1 million. That was and that was put into a model that 

is called Reams 2. (Inaudible) use in doing economic process. Hearing about this testimony so far and the result—$58 million was 

found to be lost, not only to the retirees but to Mahoning Valley. 

Where does this loss come from and how much it come from because some saving produced not only here in the valley but surrounding. So that will be cut off. As I said and also because of 

downstream economic development when these people, and it 

would bring about the development of smaller industries downstream it would amount to losing a 1,740 not only that are working 

now but down the road. So— 

Chairman MOORE OF KANSAS. Time has expired. I remind each 

of the witnesses that your testimony will be received in the record, 

and I do appreciate the gentleman’s testimony. We have to keep 

going so we can have questions by the panel, and I thank you for 

your testimony. 

Mr. AKPADOCK. Let me continue. 

[The prepared statement of Dr. Akpadock can be found on page 

46 of the appendix.] 

Chairman MOORE OF KANSAS. Last point, sir. I want to thank all 

of the witnesses for their testimony. As I said, all of the witnesses’ 

testimony, written testimony, will be received in the record and be 

considered by the committee and passed onto our fellow Members 

of Congress when we return. I recognize myself for up to 5 minutes 

for questions. 

First, Mr. Frost, and Mr. Gump, I would like to start with you. 

We are all aware of the struggles the auto industry has had, especially in the past decade. What would you say sets Delphi retirees 

apart from the larger auto industry or even other businesses with 

respect to how their pension plans have been handled? 

Mr. GUMP. I didn’t understand your question. 

Chairman MOORE OF KANSAS. Okay. The auto industry obviously 

is going through a terrible struggle right now and in the past decVerDate Nov 24 2008 18:29 Nov 12, 2010 Jkt 061847 PO 00000 Frm 00031 Fmt 6633 Sfmt 6633 K:\DOCS\61847.TXT TERRIE
26 

ade. What would you say sets Delphi retirees apart from the rest 

of the auto industry or the businesses with respect to how their 

pension plans have been handled. Is there any difference or have 

they been treated the same? 

Mr. GUMP. Actually, the Delphi retirees, because of the bankruptcy situation, obviously have been treated very differently. 

Chairman MOORE OF KANSAS. Right. 

Mr. GUMP. The issue, I think, that we’re fighting is the fact that 

some groups received preferential treatment in that bankruptcy 

while other groups were ignored or determined to be not worthy of 

that preferential treatment. The effect of that, as Dr. Akpadock 

was explaining, is devastating, quite honestly, to individuals and to 

communities in where we live. We’re all aware that no man’s an 

island. We all affect many people. We go to restaurants and laundromats and buy gas and groceries and whatnot. If we don’t have 

the money to do that, then the people downstream of that suffer 

from that also. 

So how have we been treated differently—I’m having trouble understanding the question. That’s why. The fact is that because of 

the disparate treatment and we claim potentially even illegal treatment that we have received, it’s very possible that thousands downstream, the last point Dr. Akpadock was making, right here in this 

community 1,700 people will lose their jobs just because we can’t 

go out anymore to restaurants and buy as many groceries, etc. 

They didn’t do anything, so why is it right for them? 

As Mary Ann said, we are overjoyed that the folks at General 

Motors have received their pensions. They earned it, they should 

get it; but so did we. We should get it, too. 

Chairman MOORE OF KANSAS. Do any other panelists have comments? 

Mr. DRAGOJEVIC. Yes, I guess I would like to make a statement 

regarding that myself. When this bankruptcy first occurred, we attempted to find out the amount of funding in the pension plans at 

the time of the 1999 spin-off. I personally was unable to do that. 

I had to utilize the Freedom of Information Act to go to the Department of Labor to try and ascertain that information because neither GM nor anyone locally would give us that information. 

At the health committee hearing in D.C., in December, there was 

a professor from Georgia who attempted to ascertain the same information for the committee and he ended up with the same results 

I did. He got stonewalled and we couldn’t figure that out. 

As near as I can tell from the Department of Labor’s information, 

the hourly pension plan was never fully funded. It shows us a funding rate of about 70 percent, a little higher and, in short, it also 

showed a shortfall to maintain that fund by 31.8 percent, so I guess 

the question would be if you can find out if this was ever fully 

funded, we could answer that question for you a lot better. 

Chairman MOORE OF KANSAS. Do any other panelists have a 

comment to make in response? 

Mr. FROST. Yes. 

Chairman MOORE OF KANSAS. Mr. Frost? 

Mr. FROST. First of all, most of the bailout, most people didn’t 

lose their pensions. They stayed with the companies and there’s 

27 

one group that didn’t get a topoff, so there is a difference in the 

bottom line for a certain small group of people. 

Chairman MOORE OF KANSAS. Thank you, sir. Mr. Lee, you’re 

recognized for 5 minutes for questions. 

Mr. LEE. Thank you, Mr. Chairman, and I appreciate the panel 

coming out here today and sharing your stories because, like you, 

I believe that all Americans should be protected by the Constitution of the United States and the Federal Government, their action 

really shouldn’t be predicated solely by the ability of a group’s ability to wield political power. In your case, you weren’t united in that 

regard. At the end of the day, fairness is what should count above 

and beyond everything else. 

And that, again, is my frustration as well. And as Mr. Frost had 

mentioned in his testimony, there’s truly a danger when the government is picking winners and losers. And I couldn’t agree more 

with Mrs. Hudzik who illustrated this point perfectly. It’s indeed 

shameful that our government showed favoritism to one group over 

another that resulted in financial devastation of thousands of retirees. The Treasury Department has said repeatedly that no commercial necessity existed to act on behalf of salaried retirees. Unbelievable. Unbelievable. 

I just—I would like any—if you can you please elaborate why the 

Treasury, here’s your chance, is fundamentally wrong? Anyone 

want to take a shot? I would love to hear it. 

Mr. GUMP. Let’s start off with the foundational principles that 

we have in the United States Constitution. The reason that document exists is because we felt here in America that we were not 

being treated fairly. That’s why our country exists. The principle 

of equal protection, while it’s oftentimes identified with narrowly 

defined groups, is a foundational principal of the document itself. 

The people of the United States pride themselves on the fact that 

in America you don’t have to be part of the gentry or the elite or 

in some specific group in order to receive benefits. The very fact 

that we’re here today petitioning our government for redressing 

grievances demonstrates that. 

That’s why we’re here. We have been damaged by the discriminatory decision that the Administration made during the process of 

the bankruptcy. The only way to correct that is to treat people fairly. 

This committee can only do so much. I mean, it’s not like you can 

write a check and make this all go away. You don’t have a magic 

wand; we understand that. But you’re a very powerful committee 

and what you can do is bring us together, start conversations. One 

thing we know for certain is that until the groups who are warring 

with each other, if you will, start to talk to each other, there can 

be no resolution. 

So we ask very clearly and directly, please, facilitate mediated 

conversations between the Treasury, the PBGC, and the Delphi retirees. Bring General Motors into it if you feel you must. At this 

point in time, General Motors is a government actor. They are majority-owned—General Motors is majority-owned by the United 

States Government. Their CEO was appointed by this Administration who is directly involved in the day-to-day decisions that corporation is making. 

28 

If they need to come to the table, if that’s the best way to propose 

it, fine, bring them to the table, but let’s start talking instead of 

trying to battle this out in court. These people out here who are trying to get by on $1,500 a month are sending in $10 and $15 so that we can fund over a million dollars in our lawsuit so far. It’s not right, not when our next 

door neighbors have their full pensions and the people down the 

street have their full pensions and their full health care just because they were in the group with the right initials, they have the 

political power to scare the United States Government into fully 

funding them. Unions do—they protect their people; that’s their 

purpose. They succeeded in this case. 

That union succeeded in protecting all their people. The UAW 

did an outstanding job of that; however, the fact that makes us different is the United States Government stepped into it. 

Mr. LEE. I want to jump in. I thank you. 

Mr. GUMP. I can go on for hours. 

Mr. LEE. I think you hit the nail on the head. I do appreciate 

that. There’s another point I do think is a conflict of interest. I do 

think it is worthy of this committee to continue to delve and move 

forward for fairness. I think that’s the reason all four of us are 

here. And hopefully, people are aware of the fact that Treasury 

Secretary Timothy Geithner sits on the board of the PBGC, and he 

also is the co-chair of the Auto Task Force. Keeping that in mind, 

you think about it and we all know—these were difficult times 

when the auto industry was melting down, but I think we all agree 

that the PBGC terminated the Delphi pension to help expedite the 

GM bankruptcy period to get this thing done at the sacrifice of the 

salaried retirees. It’s strictly a matter of fairness, and I can assure 

you I will do my part, I believe my committee members here are 

all in the same boat. We want to have fairness. We ask that you 

continue to push as well. 

Mr. GUMP. We’re not going to give up. 

Ms. HUDZIK. I have a comment on what you said. 

Chairman MOORE OF KANSAS. One brief comment. Time has expired. 

Ms. HUDZIK. The comment I want to make is in meetings, we 

have had two pretty outrageous comments made to us. One of 

those was that we, the salaried workforce, are viewed as all Republicans, and therefore, that would be a reason to harm us, and that 

is really a very, very bad position to take because, first of all, it’s 

not true because it’s not across-the-board; but second, I don’t understand what that has to do with this conversation whatsoever. 

Whatever you are, Republican Democrat, or Independent, it doesn’t 

make any difference. 

And the second outrageous comment that has been made to us 

is that the salaried workforce was seen as well-compensated 

enough to weather this loss and that, again, I say that’s an outrageous comment. I think and I hope I don’t speak out of turn, but 

I think somewhere in the YSU economic impact study somewhere 

in there it was determined that the pension is within $200, hourly 

and the salary, within $200, so I think those are really comments 

that have been made to us in meetings which have just further outraged us and we just can’t understand those being used, and we 

29 

would like those two reasons taken off the table because they’re an 

excuse; they’re not a reason. 

Chairman MOORE OF KANSAS. Thank you, Ms. Hudzik. Representative Wilson, you are recognized for 5 minutes. 

Mr. WILSON. Thank you, Mr. Chairman. My question will be to 

Mr. Gump. Mr. Gump, what’s the status of the proceedings, the 

court proceedings with Delphi at this point? 

Mr. GUMP. I’ll try to make this very short. You want to do— 

Mr. FROST. We’re currently waiting for the judge to decide to 

move on, so that we can get into discovery and maybe get a chance 

to actually find out what’s really going on. Each of the parties has 

submitted their motions and have submitted all of the responses to 

the court, and so right now we’re just waiting for the judge to decide that he wants to move forward. 

Mr. WILSON. Mr. Chairman, if I may, has there been any timeframe offered in that? 

Mr. FROST. No. We continue to ask questions and we don’t get 

any timeframes, but we continue to move the motions and the responses along so that we don’t hold up the court. One of the concerns we have is we don’t have deep pockets and the people on the 

other side do, and so every once in a while a new roadblock jumps 

in. They went to bankruptcy court and did some things so we had 

to have our lawyers do some things in bankruptcy court. So this 

could go on for a couple of years, and we’re pulling the money out 

of our pockets and all the donations that we have when on the 

other side we have the PBGC, the Treasury with our taxpayer 

money and deep pockets to keep this moving forward. 

Mr. WILSON. Let’s assume for a moment the task force had not 

intervened, as you think may have happened here, what would 

have been the way that you predict General Motors would have 

handled this pension issue? 

Mr. GUMP. General Motors would have probably gone eventually 

to a liquidation. Whether or not they should have entered into it 

really isn’t the question. The fact is, they did enter into it. If those 

things had happened, the effect on this community, as we have all 

discussed, would have been far more devastating than what has 

happened already. I think that was a point made before. 

It was a good thing, if I could put it that way, that General Motors was put into a position of being able to continue, and I want 

to be very clear that we need General Motors to be a strong, viable 

company. We don’t want to harm General Motors in any way. We 

just refuse to be made into sacrificial lambs so that Mark Reuss 

can collect a $7 million bonus that he just got this last quarter, 

right, the General Motors president—North American president. 

So, you know, we think that the right answer here is that while 

it would have been a bad thing to have allowed General Motors to 

simply fail, absolutely, it’s a better thing that when General Motors 

is allowed to succeed that people are treated evenly, equally with 

fairness and equity, not one group favored over another group, and 

that’s really the issue. When bad things happen in bankruptcies, 

things can become pretty evil, quite honestly. People are cut off 

and a lot of people get hurt. We’re not just investors in a company. 

We’re not speculators in a company. We put our lives in a company 

doing what we were told by the executives. So now we’re put into 

30 

a position that the executives are getting bonuses while we’re trying to figure out how we’re going to buy our next tank of gas. 

Mr. WILSON. I think it has been said certainly by Congressman 

Lee and all of us up here that we think fairness is one of the biggest things that we need to strive for. And so that being said, Mr. 

Chairman, I yield back the balance of my time. 

Chairman MOORE OF KANSAS. Thank you, gentlemen. And next, 

the Chair recognizes Congressman Ryan. 

Mr. RYAN. Thank you, Mr. Chairman. Let me respond a little bit 

to what Mary Ann said. There are a lot of Democrats up here and 

we have not always pleased the Administration by continuing this 

fight. I will tell you that speaking on behalf of myself and I represent all my constituents in Washington and this is something 

that I recognize not only the personal stories you shared with us 

today but the economic impact that this is having to our region and 

to our State, and so I want to kind of build on what Bruce talked 

about a little bit earlier. One of the issues we have I think in this 

country is we stopped making things. We stopped manufacturing in 

the United States, part of the problem we have we get into this big 

financial scheme where people are moving money around and not 

bringing any real value, and the auto industry has always been an 

essential component to the manufacturing base of the United 

States, not just for auto, but for defense capabilities, should we 

need them. Losing the auto industry is something that we went 

through great lengths to prevent, and this is obviously a negative 

byproduct of that. 

We need to find a fix. One of my concerns, and I will ask questions I know you already know the answers to. I want to make the 

point here publicly is that this situation not being fixed is going to 

have economic consequences for the American car manufacturers, 

so if I could ask Bruce and at least the four of the workers from 

Delphi could answer this. I just want to ask, Bruce, what was 

your—what are you making now, if you don’t mind saying, I think 

I heard you say it before with your pension and what would you 

have made if the bridge continued and you got your ‘‘topoff?’’ 

Mr. GUMP. My major high paid salary pension was $3,400 a 

month, and it’s been reduced to about—my wife’s sitting there. She 

knows better, I think $2,300 is about— 

Mr. RYAN. What’s the allowance—she gives you an allowance? 

Mr. GUMP. Actually, we tend to work things out pretty carefully, 

so—yes. I think I have $5 more in my wallet today than she does, 

so I’m buying lunch. 

Mr. RYAN. You were at $3,400. 

Mr. GUMP. I was at $3,400, down to $2,300 now. 

Mr. RYAN. Mr. Frost? 

Mr. FROST. Almost the same exact numbers. 

Mr. RYAN. Mary Ann? 

Ms. HUDZIK. I was at $3,050, roughly. Right now I’m at, I don’t 

know, maybe $1,800. Maybe. 

Mr. RYAN. If you wanted to chime in here? 

Mr. DRAGOJEVIC. I will. Let’s face it. Fair and equitable. I will 

speak to this issue. My pension originally was about $3,100, or 

thereabouts. The portion that I’m receiving from the PBGC is about 

31 

$1,500 a month due to my surviving benefit, but General Motors 

has agreed to a topoff so I really haven’t noticed a difference at all. 

Ms. HUDZIK. I want to add something to that I forgot. 

Mr. RYAN. Really quick. 

Ms. HUDZIK. What I forgot is many of us are kind of holding our 

breath because we know that the PBGC has told us in 2 to 3 years, 

they’re going to calculate these pensions again, so my fear—my 

true fear is that money will decrease substantially again. 

Mr. RYAN. I’ll do this. So you have seen a substantial reduction. 

Mary Ann, how many, if you can just guesstimate, don’t give me 

specifics, how many American cars have you purchased in your lifetime? 

Ms. HUDZIK. I can’t recall, but I have always purchased General 

Motors cars my entire life and so has my family. So— 

Mr. RYAN. Are you more inclined or less inclined to buy an American car? 

Ms. HUDZIK. No, I will not be purchasing a GM car in the near 

future. Unless GM takes care of this, and then I would be ready 

and willing to come back into the GM family. 

Mr. RYAN. Mr. Frost? How many cars have you purchased in 

your lifetime? 

Mr. FROST. I would probably say 30, and that’s only myself personally, and then there’s all of my friends and families that we had 

under the GM program. 

Mr. RYAN. Would your friends and family be less inclined probably to buy General Motors cars? 

Mr. FROST. More than likely. One of my clients right now is a 

large Ford supplier so it will probably be a Ford so we can keep 

it American. 

Mr. RYAN. Mr. Gump? 

Mr. GUMP. We’re a little more frugal and made it last a little 

longer. Altogether we have had six or eight GM vehicles, always 

General Motors. I want to be clear because I’m here representing 

our organization that the DSRA takes a total and neutral stance 

on buyer decisions. We make no recommendations one way or the 

other. Me, personally, I am not anxious to buy another General Motors car until General Motors chooses to and the United States 

Government, and I want to be careful that we’re not aimed at General Motors; we’re aimed at the situation that was orchestrated by 

the Treasury. 

Mr. RYAN. I appreciate that. 

Mr. GUMP. Until we’re treated fairly. 

Mr. RYAN. I don’t mean to be smart, but I think it’s important 

for everyone to recognize this ripple effect of what’s happening 

here. The economic impact obviously from the millions and millions 

of dollars that won’t get circulated. The fact that you have thousands of American traditional GM buyers as we’re trying to stand 

up General Motors, got the Cruze going, making good cars and 

doing a great job. We don’t want that to be deleted. We want that 

to take off. 

We need to manufacture in the United States. I feel like things 

like this can harm those initiatives. I know some of us are working 

on in Washington. Thank you for that. I wanted to make it apparent to everybody; I wanted it to be on the record. I will ask you, 

32 

you don’t have to answer here, but I would love for DSRA to help 

us push Congressman that has been mentioned here. It’s critical 

that we do not allow these situations to continue for others, that 

we’re not back here if not the Delphi salary with some other organization that is deeply devastated, many catastrophes we’re dealing 

with now, so I hope you can join us with that effort. I want to say 

thank you. I know how difficult it is for all of you to come up in 

front of public and TV cameras to share your story. It’s quite courageous. Thank you for that as well, thank you, Mr. Chairman, for 

your generosity. 

Chairman MOORE OF KANSAS. Thank you, sir. And I want to, 

again, thank all the witnesses for your testimony here today. I 

know my colleagues will take what we have learned back to Washington and share with our colleagues. The Chair notes that Members present may have additional questions for our witnesses which 

they may wish to submit in writing. Without objection, the hearing 

record will remain open for 30 days for Members to submit written 

questions to our witnesses and to place their responses in the 

record, as well as for other committee members of Ohio, council 

members not present to enter their own witness statements into 

the record; and, again, I thank all of you in the audience for coming. I thank our panelists and the people up here today for attending this hearing. This hearing is adjourned. 

[Whereupon, the hearing was adjourned.] 

(33) 

A P P E N D I X 

July 13, 2010 

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