Last week, The Nation exposed the Romneys investment in an autoparts manufacturer called Delphi.
Delphi, now in the possession of its hedge fund creditors, told the Treasury and GM to hand over $350 million immediately, “because if you don’t, we’ll shut you down.”Delphi then off-shored production to China, screwing tens of thousands of American workers, all while vulture-investors (including the Romneys) made off with a fortune.
The automaker had left the inventory of its steering column and other key components in Delphi’s hands. If Delphi laid siege to GM’s parts supply, the bailout would fail and GM would have to be liquidated or sold off—as would another Delphi dependent, Chrysler.
The public has no idea how much the Romneys profited from shipping these jobs to China, since Willard Mitt Romney won't release his 2009 tax returns.
In their 2011 and 2012 Federal Financial Disclosure filing, Ann Romney’s trust lists “more than $1 million” invested with Elliott.The Romneys received this huge return from a company that the "the federal government sent, directly or indirectly, more than $12.9 billion".
It is reasonable to assume that Singer treated the Romneys the same as his other investors, with a third of their portfolio invested in Delphi by the time of the 2011 initial public offering.
Since the November 2011 IPO, Delphi’s stock has roared upward, boosting the Romneys’ Delphi windfall from $10.2 million to $15.3 million for each million they invested with Singer.
without taking billions in taxpayer bailout funds—and slashing worker pensions—the hedge funds’ investment in Delphi would not have been worth a single dollar, according to calculations by GM and the US Treasury.And how did the vulture capitalists thank the American people?
they rid Delphi of every single one of its 25,200 unionized workers.Adding insult to injury, Delphi even kept Uncle Same from taxing its profits by moving its location of incorporation from Troy, Michigan to the Isle of Jersey, a European tax haven.
Of the twenty-nine Delphi plants operating in the United States when the hedge funders began buying up control, only four remain, with not a single union production worker. Romney’s “job creators” did create jobs—in China, where Delphi now produces the parts used by GM and other major automakers here and abroad. Delphi is now incorporated overseas, leaving the company with 5,000 employees in the United States (versus almost 100,000 abroad).
Besides losing their jobs and health insurance, the fired workers also took serious hits to their pensions when Delphi refused to pay and instead off-loaded the responsibility on the U.S. government. The Pension Benefit Guaranty Corporation, which is now covering $5.6 billion for these pensions, has a "maximum guaranteed benefit" as dictated by law, and so the workers took substantial losses estimated at about $1 billion overall.
Delphi’s stockholders—the Romneys included—had one easy way to rectify the harm to these pensioners, much as GM did for its workers: just pay up.And so the story has come full circle.
Making good on the full pensions for salaried workers would cost Delphi a one-time charge of less than $1 billion. This year, Delphi was flush with $1.4 billion in cash— meaning its owners could have made the pensioners whole and still cleared a profit. Instead, in May, Delphi chose to use most of those funds to take over auto parts plants in Asia at a cost of $972 million—purchased from Bain Capital.
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