When firms restructure, do retirees disappear?
The Oct. 21 News article, “When employees retire, but costs don’t,” quoted Mitt Romney’s opposition to President Obama’s auto bailout. In Romney’s view, the automakers need to drastically restructure and relieve themselves of “insurmountable labor and retiree burdens,” among other things.
No question, automakers need to address unsustainable costs. Here are questions he doesn’t seem to ask. When companies restructure to cut retiree benefits, do retirees go away? Have they not forgone current wages over the course of their working lives for the expectation of benefits in retirement? Should industry be encouraged to shift the “burden” of past decision-making off their books to society? And whose voice should be at the table when those decisions are negotiated?
Salaried retirees at Delphi should be bitter. It’s not fair. They absorbed the sacrifice because their bargaining leverage is weak. Hourly employees through the United Auto Workers have a place at the table. At Ford, for example, the company and the UAW worked together to avoid bankruptcy. Can there be a better example of the value of collective bargaining? Thank goodness the UAW gives voice to the interests of autoworkers it represents.
Romney’s prescription would be to let the industry and bankruptcy courts decide. How much worse would the impact on communities like Lockport be if Delphi retirees, both salaried and hourly, were “burdened” with a significant denial of earned benefits?