Ryan Seeks to Put Negative Spin on Auto Bailout in Ohio

Rebecca Kaplan

SABINA, Ohio – Vice presidential candidate Paul Ryan sought on Saturday to undermine President Obama’s advantage in Ohio due to the administration's auto bailout by arguing that the government recovery unfairly favored unionized workers -- an accusation that an independent fact-checking website has disagreed with.

Ryan, speaking at a high school gym here, for the first time said that the bailout had been unfair to non-unionized, salaried workers at the Delphi Corp. plants, who saw their pensions slashed after the bailout even as their unionized counterparts saw their additional retirement benefits guaranteed.

“The president likes to go around Ohio talking about how he saved the auto industry, how the auto bailout was such a success. Tell you what: He hasn’t talked to these Oak Creek salaried employees, he hasn’t talked to these Ohio Delphi salaried employees because this is one of those examples of the government picking winners and losers,” Ryan said.

“And yes, they picked some losers, and those people are here with us and all they want is to have fairness. All they want is transparency and honesty from their federal government, and they’re not getting it. And they deserve better than that.”

Ohio Rep. Michael Turner, who has advocated on behalf of the non-union Delphi workers, also has charged that the workers were the victims of government favoritism of unions -- a charge that the fact-checking site PolitiFact rated “mostly false.” It said, "The evidence to date is thin when it comes to claims of unfairness from the Obama administration."

Democrats countered that letting General Motors, and by extension, Delphi, go under would have wiped out the workers’ pensions entirely.

“Congressman Ryan is trying to rewrite history. The fact is that when the American auto industry and its workers were on their knees, Mitt Romney turned his back," said Obama spokesman Danny Kanner. "Had we ‘let Detroit go bankrupt’ like Romney wanted, Delphi likely would have been liquidated and its employees would have lost their jobs. And while Ryan shamelessly uses the misfortune of Delphi workers to attack the president, it was Romney who personally profited off their misfortune.”

Kanner was referring to Romney’s investment in a Elliott Associates, LP, a hedge fund that acquired a stake in Delphi during its bankruptcy.

Delphi, once part of GM, was spun off as an independent company in 1999. At that point, three major unions -- including the United Automobile, Aerospace, and Agricultural Implement Workers of America -- secured guarantees that GM would “top up,” or guarantee, the full value of pensions of the workers they represent in the event that the new company failed.

The company did file for bankruptcy protection in 2005, at which point the pensions of nonunionized workers were placed under the control of the Pension Benefit Guaranty Corp., the federal agency that insures pensions.

GM took over Delphi’s liabilities in 2007, continuing their pension agreement with the unions. Those agreements were preserved during the 2008 auto bailout to keep Delphi running and GM’s supply chain complete, but the nonunionized workers’ pensions had already been turned over to PBGC and 21,000 salaried employees saw their pension cut by 70 percent as a result of the bankruptcy agreement.

Before his rally in Sabina, Ryan met with Turner, as well as Tom Rose of the Delphi Salaried Retirees Association and about nine non-union Delphi retirees who faced significant cuts to their pensions and benefits. As the Republicans fight to establish a lead in Ohio, it is likely a story that Ryan will continue to tell on the campaign trail.