class=”times”> A Wall Street Journal news report said the move by the Pension Benefit Guaranty Corporation (PBGC) comes after Delphi did not make pension payments of several hundred million dollars in June and July.
class=”times”> The Journal said the new claims involve Delphi’s foreign operations, which are believed to be profitable. The firm sought bankruptcy protection in October 2005 and has struggled to emerge from it (See Delphi Closer to Clearing Bankruptcy Emergence Hurdles ).
class=”times”> Agency officials sent a second letter in the past month to GM and Delphi executives urging GM to absorb at least $1.5 billion in Delphi pension obligations before September 30 before new funding regulations take effect and make a deal much more expensive for the employer, the news report said. The first PBGC letter went out in mid-August.
class=”times”> Meanwhile, GM and other Detroit auto makers are making a plea to lawmakers in Washington for as much as $50 billion in federal loans. “I can’t speak for the rest of the government, but I assume if GM is asking for assistance from the government generally, the status of the GM-Delphi pension situation would be highly relevant,” PBGC Director Charles E.F. Millard, told the newspaper.
class=”times”> Millard promised his agency will delay the $900 million claim if GM and Delphi file documents with the U.S. Bankruptcy Court by Friday agreeing to a deal where GM’s pension absorbs between $1.5 billion and $3.4 billion in Delphi pension liabilities.
class=”times”> Delphi’s pension plan, which covers about 85,000 people, had obligations of $14.05 billion at the end of 2007, but was underfunded by $3.3 billion, according to Securities and Exchange Commission filings, the Journal said.
« Higher Ed Cost Increases Up Slightly in 2008