Ryan Blames Obama for Delphi Layoffs Romney Cashed In On
While the Romney campaign continues to push its lie about Jeep shifting jobs from Ohio to China, Paul Ryan has been busy trying to hoodwink Buckeye voters with a tall tale about another company saved by President Obama's rescue of the U.S. industry. Recycling a charge Team Romney first introduced in May, the GOP's number two blasted Obama for preserving the pensions of thousands of laid off union workers at parts manufacturer Delphi, pensions which the firm's former salaried employees were denied.
Of course, Ryan's slander about the multi-billion federal bailout that kept Delphi afloat isn't merely false. As the record shows, the closure of every U.S. Delphi plant and the loss of 25,000 union jobs were engineered by Ryan's long-time right-wing moneyman, hedge fund titan Paul Singer. And as it turns out, among those who made millions from Singer's Delphi dealings was none other than Mitt Romney.
That didn't stop Rep. Ryan from his harsh attack this weekend in Ohio. As CBS reported:
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."
What the American people deserve is the truth. And they certainly are not getting it from Mitt Romney and Paul Ryan.
For starters, if the Obama administration hadn't stepped in with TARP funds and commitments by GM ultimately costing the U.S. Treasury $12.9 billion, there would be no Delphi, period. And as the Los Angeles Times reported, there was also the small matter of honoring existing contracts:
Delphi salaried employees allege that the government unfairly turned over their pensions to the Pension Benefit Guaranty Corp., which will not give workers the pensions they thought they'd be receiving, while union workers for Delphi were able to keep their pensions. About 20,000 salaried workers lost their pensions, including some from Ryan's Wisconsin district.
It may be difficult to place the blame for this on Obama, though: The nonpartisan Government Accountability Office looked into the pension discrepancy and found that the union had a preexisting contract that GM would provide some retirement benefits to Delphi union members "should their pension plans be frozen or terminated," while salaried employees did not have such a contract. Further, a University of Nevada, Las Vegas, law professor said that Delphi would likely have failed without the auto bailout, according to Bloomberg News.
But missing altogether from Ryan's pension fund passion play is the story of Delphi's former majority owner, Paul Singer and his Elliott Management firm. As it turns out, Singer's company made billions from the Delphi rescue, millions of which ended up in the hands of Ann and Mitt Romney.
As Detroit teetered on the brink of collapse in 2009, Obama car czar Steven Rattner quickly learned that former GM subsidiary and essential parts supplier Delphi would have to be rescued as well. As Greg Palast reported last week in The Nation:
In Rattner's memoir of the affair, Overhaul, he describes a closed-door meeting held in March 2009 to resolve Delphi's fate. He writes that Delphi, now in the possession of its hedge fund creditors, told the Treasury and GM to hand over $350 million immediately, "because if you don't, we'll shut you down." His explanation was corroborated by Delphi's chief financial officer, John Sheehan, who said in a sworn deposition in July 2009 that the hedge fund debt holders backed up their threat with "an analysis of the cost to GM if Delphi were unwilling or unable to provide supply to GM," forcing a "shutdown." It would take "years and tens of billions" for GM to replace Delphi's parts. At that bleak moment, GM had neither. The automaker had left the inventory of its steering column and other key components in Delphi's hands. If Delphi laid siege to GM's parts supply, the bailout would fail and GM would have to be liquidated or sold off--as would another Delphi dependent, Chrysler.
But as Palast explained, Singer didn't merely hold GM hostage, he and his hedge fund partners torpedoed a June 2009 offer for Delphi from GM and Platinum Equity Delphi "which would have left several of Delphi's plants still in business, still unionized--and still in the United States. Crucially, the deal would have returned key Delphi operations, including the production of steering columns, directly to GM." Instead, under the control of Singer and his partners, Delphi shuttered its U.S. manufacturing and outsourced the work to plants in China. And as Palast concluded:
"Of course, it wasn't Obama who refused to pay the Delphi pensions; it was Paul Singer and the other hedge funds controlling Delphi. The salaried workers' pensions were, after all, an obligation of Delphi's owners, not the government. Delphi's stockholders--the Romneys included--had one easy way to rectify the harm to these pensioners, much as GM did for its workers: just pay up."
Elliott Management's fund paid 67 cents a share to gain controlling interest of Delphi. When it took the company public in 2011, it reaped $22 a share. That $1.29 billion windfall represented a forty-four fold return for Singer's investors. Among them, Ann and Mitt Romney, whose jackpot winnings for their $1 million investment could range from $15 million to over $100 million:
In their 2011 and 2012 Federal Financial Disclosure filing, Ann Romney's trust lists "more than $1 million" invested with Elliott. This is the description for all of her big investments--the minimal disclosure required by law. (Had Romney kept the holding in his own name, he would have had to reveal if his investment with Singer had made more than $50 million.)
It is reasonable to assume that Singer treated the Romneys the same as his other investors, with a third of their portfolio invested in Delphi by the time of the 2011 initial public offering. This means that with an investment of at least $1 million, their smallest possible gain when Delphi went public would have been $10.2 million, plus another $10.2 million for each million handed to Singer--all gains made possible by the auto bailout.
But that's just the beginning. Since the November 2011 IPO, Delphi's stock has roared upward, boosting the Romneys' Delphi windfall from $10.2 million to $15.3 million for each million they invested with Singer.
Not a bad payout for someone who opposed the Obama auto industry rescue that made it all possible.
Sadly, the ironies of Paul Ryan's Delphi fraud hardly end there. Earlier this year, the Let Freedom Ring Super PAC began airing ads with former Delphi employees attacking President Obama over their lost pension funds. (That effort is just part of its "Auto Bailout Truth" disinformation campaign.) Among its board members? Paul Singer.
In any event, Team Romney will doubtless continue its Delphi mythmaking through Election Day, no matter how laughable. While some its former employees point the finger at Barack Obama, Mitt Romney is laughing all the way to the bank and, perhaps, the White House.