I can relate to feeling reduced by health problems. I don’t even remember falling asleep last night. Years of health problems do that and I wish I had a union to rely on to help with retirement. So too, do the people you will learn about below.
What you are about to read is a story about people whose lives were dedicated to a craft, in return for a promise of security. A promise that was broken. Because they were not in a union, the promise didn’t have to be kept.
Dave Muffley is a retired maintenance mechanic from Russiaville, In for the Delphi, Corp. That is a subsidiary of GM. But Dave was not in a union. Nevertheless, he thought his retirement would be secure. Now had he been in a union, specifically the United Auto Workers, it would have been.
The Russiaville resident, now 68, lost 30% of his retirement savings, his promised health care coverage and his faith in government. Muffley is one of an estimated 20,000 Delphi workers hurt by the GM bankruptcy, and many have spent the past 13 years fighting to get back what they lost. After taking the issue all the way to the U.S. Supreme Court, which declined to hear their case this year, the retirees were cut off from their last legal remedy.
Now, they’re looking to Congress to do for them what the courts would not. Legislation to restore the pension savings of the workers has gained support from the left and the right in Congress. It passed the House on Wednesday and supporters are hopeful the Senate will follow suit.
The act is named after Dave’s wife, Susan Muffley, who became ill and died while all of this was being litigated. Dave, realizing he did not have the protections of a union, took a buyout from Delphi at age 55, then took several jobs in succession to tide him over until age 62. While all of this was going on, Susan took ill with pancreatic cancer and died within three years.
Dave estimates he has lost at the least, $130,000 in retirement savings.
The retirees allege that they were discriminated against as salaried employees, compared with union-covered workers whose pensions were preserved through the bankruptcy. The salaried workers are the engineers, technicians and mid-level swath of employees who stood between the well-paid executives and the union-covered workers at the company.
That is one way to view it. The other way is use this story as a warning to all those who marginalize unions. The truth is, Delphi did not assume liability for the pensions of their various salaried workers, because they did not have to. There was no obligation to them, as there was with the unions.
While the government’s Pension Benefit Guaranty Corporation did interject, and partially cover the salaried worker’s benefits, some 20,000 of them, they only covered up to the maximum benefit the agency was obligated to pay. As a result, the pensions of some salaried workers were slashed by as much as 70 percent, crippling their retirement prospects. What is notable here is that GM did cover the union workers.
They were legally obligated to do so.
This is the power, of a union.
The salaried workers simply had no leverage. While the workers blame Tim Geithner and Larry Summers, the then Treasury Secretary and National Economic Council Director, respectively, the truth is they were not singled out, as they received what was obligated by the parties to give them.
Which of course, was not enough. There are stories of woe, like this one from a nurse in Greenville, South Carolina. Julie Naylor is a retired nurse, 68, who says if these benefits were restored her husband Bruce could finally get a chair that fits his 6 foot 6 frame. Bruce, is paralyzed on his right side from a stroke, and has little in the way of speech capabilities. For her, the idea that Congress could step in would be a lifeline, a way to meet their basic necessities.
Due to spiraling medical costs, their hoped for ship of retirement prosperity has long since sailed.
While there is bi-partisan support, indeed President Biden himself is on board the proposed top-off to help the salaried workers, it remains to be seen if it will gain the needed backing to finally pass.
All over the country private companies like Delphi get sold, and promises not bound by labor agreements get eviscerated. This has happened for decades. Dave and Bruce were not part of a union, and therefore received only the benefits the parties involved were obligated to distribute.
At the time, the Obama administration was doing its best to save the entire U.S. auto industry. Macro-politics collided with micro-economics, and the result is not everyone ended up whole.
I of course, as a progressive, take no issue with finding the funds to help these people, but it shines a light on the inadequacies of our current retirement system. Bob Good, Republican from VA, says he does not think Virginia taxpayers should have to cover the bill for out of state workers. I would refer him to a definition, which would be “United.” And I have no doubt some Republicans look to use their support of this act as a way to undercut unions, which has long been their goal.
Something else to consider is that in bankruptcy preceedings, there is priority given to certain creditors above pension recipients. This could be addressed as part of a long term solution.
But in the free market, labor long since recognized that only collective bargaining, and the influence that wields, protects workers. If I take anything from this story other than profound sadness, it is that the workers in these rust belt blue collar areas have indeed received the shaft that is our transition to our service/technological economy. They are eating ground beef on a good day.
But if you have a “UAW” patch on your jacket, you are probably eating steak.
You probably have adequate medical care.
And your wheelchair, if needed, probably fits your frame.
Unions work for workers.
It is time all workers work to strengthen unions.
-ROC
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