Federal auditors study if politics swayed GM decision on Dephi pension plan

Article by Christian Andrei, on January 30, 2011

Federal auditors are trying to determine if the Obama administration pressured General Motors to give more funding for Delphi Corp.'s pension plan for hourly workers.

This audit is centered on GM's move after its 2009 bankruptcy to add to Pension Benefit Guaranty Corp. benefits for Delphi hourly workers but not offering them for salaried retirees.

Neil Barofsky, the special inspector general who oversees the $700 billion federal bailout of financial institutions and the auto sector, posted the audit recently in his quarterly report to Congress.

Several congressmen, who are led by Rep. Christopher Lee, R-N.Y., have raised the question of whether political considerations influenced GM's decision on behalf of hourly retirees.

Barofsky added that he is reviewing the U.S. Department of Treasury's role in GM's October acquisition of subprime auto finance company AmeriCredit, which is now known as GM Financial.

Eventually, GM Financial may compete against the Ally Financial bank, formerly GMAC, which got a federal loan as part of the $700 billion bailout, according to the Congressional Oversight Panel (another bailout overseer).

Earlier this month, the panel led by former U.S. Sen. Ted Kaufman, said that Ally may have difficulty repaying taxpayers as a result of GM's acquisition of AmeriCredit. The panel said that the Treasury declined to obstruct GM's purchase.

Spokesmen for the Treasury Department and GM refused to give comments. Barofsky, a former federal prosecutor, is also conducting a probe of possible illegal conduct by GM and Chrysler in their dealer reductions. It’s unclear when the audits are expected to be completed.

Topics: gm, delphi, united states

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