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GAO-11-373R 1 (2011-03-30)

handle is hein.gao/gaobaanxc0001 and id is 1 raw text is: ~GA 0 .. . A co bilit y I Integrity * Reliability United States Government Accountability Office Washington, DC 20548 March 30, 2011 Congressional Requesters Subject: Key Events Leading to the Termination of the Delphi Defined Benefit Plans The Delphi Corporation was a global supplier of mobile electronics and transportation systems that began as part of the General Motors Corporation (GM)' and was spun off as an independent company in 1999. Following bankruptcy in 2005, Delphi's six qualified defined benefit (DB) plans were terminated and trusteed by the Pension Benefit Guaranty Corporation (PBGC) in July 2009. These terminations culminated from a complex series of events involving Delphi, GM, various unions, the U.S. Department of the Treasury (Treasury), as well as PBGC. You asked us to examine a range of issues related to PBGC's termination of Delphi's DB plans,2 such as the decision to terminate, the efforts to secure plan assets, the treatment of collective bargaining agreements, and Treasury's role throughout the process. As discussed with your staff members in December 2010, this report includes a timeline of key events leading to the termination of Delphi's plans (see enclosure I). The timeline focuses, in particular, on events related to the reasons for GM providing retirement benefit supplements to certain Delphi employees, but not to others, and Treasury's role in those events. We will compare PBGC's process for terminating Delphi's pension plans with its process for terminating other large, complex plans in a future report. To construct the timeline, we relied on publicly available documents, such as bankruptcy filings by GM and Delphi, company reports to the Securities and Exchange Commission, press releases; and on documents received from groups with whom we have talked, including Delphi, GM, the Delphi Salaried Retiree Association (DSRA), PBGC, and Treasury. We conducted our work from October 2010 to March 2011 in accordance with all sections of GAO's Quality Assurance Framework that are relevant to our objectives. The framework requires that we 1Prior to bankruptcy reorganization, GM's legal name was General Motors Corporation. The legal name of the new entity that was created through the bankruptcy process is General Motors Company (the entity that purchased the operating assets of the pre-reorganization corporation, which we discuss later in this report). As of October 19, 2009, General Motors Company became General Motors LLC. Throughout this report, in cases where a distinction is important, we refer to the pre-reorganization corporation as old GM and the post-reorganization company as new GM. 2For a summary of Delphi's six qualified DB plans, insured by PBGC, see enclosure II. GAO-11-373R Delphi Pension Plans Page I

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