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Monday, October 10, 2005

Another pension default?
Posted by Jill | 6:48 AM

Note that the obligation to pay one's, well, obligations only applies to individuals under the new bankruptcy law. Corporations are still allowed to stiff their workers and retirees:

Delphi Corp. (NYSE:DPH - news), the U.S. auto-parts supplier that filed for Chapter 11 bankruptcy protection Saturday, plans to shut down or sell off a substantial part of its U.S. operations, the Wall Street Journal reported Monday.

But Delphi Chief Executive Robert "Steve" Miller told the Journal in an interview he was not sure if the company would ask the U.S. government to take over its pension obligations.

Analysts estimated GM's obligation for retiree benefits at somewhere between $1.6 billion and $6.6 billion. The company's tab for retiree pensions could run another $3 billion to $4.5 billion if Delphi terminates its plan, the Journal said.

UAW President Ron Gettelfinger in a statement called the filing a "bitter pill" and criticized Delphi for sweetening the severance packages of 21 top executives the day before seeking bankruptcy protection.

Meanwhile, Delphi seeks relief from the bankruptcy court, including permission to cut hourly wages.

The paper also said Delphi is moving John Sheehan from chief operating officer to chief restructuring officer. Robert Dellinger will become chief financial officer, effective immediately.


I wonder what kind of concessions Sheehan and Dellinger and the other guys who ran the company into the ground are going to make?
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