Exhibit 99.5
Benefit Guarantee
During
these negotiations, the Union raised concerns about the security of pensions, retiree
medical, and certain other benefits described below for International Union of Electronic,
Electrical, Salaried, Machine and Furniture Workers, AFL-CIO (IUE) 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
IUE-represented Delphi employees who bad unbroken seniority
and were employed by GM under the terms of the 1996 GM-IUE 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 IUE employees employed under a competitive wage
agreement as of
May 28, 1999, i.e.,
Tier II or Tier III employees.)
a. |
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In the event that Delphi or its successor company(ies) has ceased doing business on
or before June 1, 2004: |
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1. |
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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. |
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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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1. |
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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. |
General Provision
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 obligation 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 IUE 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 obligation as described in this letter will not be triggered by a short-term failure (i.e.,
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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