Exhibit 99.4
Benefit Guarantee
During
these negotiations, the Union raised concerns about the security of
pensions, retiree
medical, and certain other benefits described below for United Steelworkers of America (USWA)
represented former GM employees who are now employed by Delphi
Automotive Systems Corporation (“Delphi”).
In order
to address these concerns, GM guarantees the provision of the
benefits listed below, to the
extent described herein, to those USWA-represented Delphi employees who had unbroken seniority and
were employed by GM under the terms of the 1996 GM-USWA National Agreement as of the spin-off of
Delphi from GM on
May 28, 1999 (the
“Covered Employees”). (However, such guarantees do not apply to
those Delphi USWA employees employed under competitive hire agreements unless such employees are at
parity for wages and benefits as of
May 28, 1999.)
a. In the
event that Delphi or its successor company(ies) has ceased doing business on or
before
June 1, 2004:
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Covered Employees at Delphi who are laid-off will be entitled to layoff benefits available to
laid-off GM hourly employees under the GM hourly National Agreement and Supplemental Agreements.
Further, any such benefits provided by GM shall be secondary to benefits provided by Delphi, any of
its subsidiaries or affiliates, or any of their successor company(ies). |
b. In the event that Delphi or its successor company(ies) has ceased doing business, terminated its
pension plan covering the Covered Employees and all other union-represented hourly-rate employees
in the United States, or ceases to provide on-going credited service
for the Covered Employees and
all other union-represented hourly-rate employees in the United States under such pension plan due
to Financial Distress, on or before
October 18, 2007:
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GM will provide up to 7 years of credited service at the level and scope in effect at Delphi at
such time to Covered Employees working at Delphi. Further, any such benefits provided by GM shall be
secondary to benefits provided by Delphi, any of its subsidiaries or affiliates or any of their
successor company(ies), or the PBGC. However, In no event shall GM provide pension benefits on such
credited service at a level and scope that exceeds that being provided to hourly retirees of GM. |
c. In the event that Delphi or its successor company(ies) on
or before
October 18, 2007 (x) due to
Financial Distress fails or refuses to provide post-retirement medical benefits to eligible Covered
Employees and all other union-represented hourly-rate employees in the United States retired from
Delphi, or (y) due to Financial Distress reduces the level of post-retirement medical benefits for
eligible Covered Employees and all other union-represented hourly-rate employees in the United
States retired from Delphi below the level of benefits which, at that time, GM is providing to its
hourly retirees:
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GM shall guarantee such retired Covered Employees post-retirement medical benefits at
the level and scope in effect for hourly GM retirees at the time of
the event described in c.(x) or c.(y). Further, any such coverage provided by GM shall be secondary to coverages, if any, provided
by Delphi, any of its subsidiaries or affiliates, or any of their
successor company(ies). |
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For purposes of this agreement, the term “post-retirement medical benefits” shall include
hospital, surgical and medical benefits, Medicare Part B benefits, prescription drug
benefits, dental, vision, and hearing benefits, and any other similar benefit for retirees which is
now provided, by GM to its hourly retirees. |
d. In the event that Delphi or its successor company(ies) on or
before
October 18, 2007 (x) due to
Financial Distress fells or refuses to provide post-retirement life insurance benefits to eligible
Covered Employees and all other union-represented hourly-rate employees in the United States
retired from Delphi, or (y) due to Financial Distress reduces the level of post-retirement life
insurance benefits for eligible Covered Employees and all other union-represented hourly-rate
employees in the United States retired from Delphi below the level of benefits which, at that time,
GM is providing to its hourly retirees:
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GM shall guarantee such retired Covered Employees the level of post-retirement life insurance
coverage equal to the amount in effect for hourly GM retirees at the time of the event described
in clause d.(X) or d.(y). Further, such life insurance shall be subject to reduction in accordance
with provisions of the plan covering hourly GM retirees in effect at such time. In addition, any
such coverage provided by GM shall be secondary to coverage provided by Delphi, any of its
subsidiaries or affiliates, or any of their successor companies. |
e. In the event that Covered Employees and
all other union-represented hourly-rate employees in the
United States on or before
October 18, 2007 receive pension benefits at a level below that called
for in any applicable Delphi/USWA agreement or pension plan due to Financial Distress:
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GM shall provide supplemental payments to such retired Covered Employees which, when combined
with any pension benefits received (x) from a pension plan sponsored by Delphi, any of its
subsidiaries or affiliates or any of their successor company(ies), (y) from the PBGC, and/or (z)
from a pension plan sponsored by GM, result in the retired Covered Employees receiving pension
benefits equal to those called for in the Delphi/USWA agreement applicable at such time. |
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General Provisions
GM’s obligations as described in this letter will continue in effect with respect to each of
the benefits described above, regardless of the expiration of any collective bargaining agreement
for as long as GM is providing the corresponding benefit to
its hourly employees or retirees. This agreement may be modified only by mutual agreement of the
parties.
GM’s obligations to provide a particular benefit under this letter shall not apply to the extent
that Delphi provides a lower scope or level of such benefits to Covered Employees than that
provided to hourly active or retired non-Covered Employees. In addition, in no event shall GM be
required to provide benefits to Covered Employees at a level and scope that exceeds that being
provided to hourly retirees of GM.
As used herein, the term “Financial Distress” means a risk affecting Delphi’s continuing financial
viability. The USWA cited companies it is aware of that another union representing GM employees has
a bargaining relationship with, as examples of the type of situation they are concerned about when
referencing Financial Distress. The parties also discussed a significant drop in the credit rating,
reorganization in bankruptcy, and a qualified opinion by Delphi’s auditors regarding Delphi’s
prospects as an on-going concern and agreed that these types of circumstances are nonexclusive
examples of conditions associated with Financial Distress.
In the event that the Financial Distress is eliminated, and Delphi restores the benefits at issue
to the level and scope in effect immediately before the reduction that triggered the guarantee, GM
shall be relieved of its obligation for so long as Delphi continues to provide the restored level
and scope of benefits.
GM’s
obligations as described in this letter will not be triggered by a short-term failure(i.s.,
less than 60 days) by Delphi to maintain the benefits and/or coverages described above, provided
that Delphi is taking reasonable steps to cure such failure during such time.
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