Exhibit 99.2
EXHIBIT A
Benefit Guarantee
During these negotiations, the Union concerns about the security of
pensions, retiree medical, and certain other benefits described below for
UAW-represented former GM employees who are 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 UAW-represented Delphi
employees who had unbroken seniority and were employed by GM under the
terms of the 1996 GM-UAW National Agreement as of the spin-off of Delphi from GM
on
May 28, 1999 (the
“Covered Employees”).
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 employees under the GM-UAW
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, or
ceases to provide on-going credited service for the covered Employees under
such pension plan due to Financial Distress, on or before the eighth anniversary
of the Effective Date of the 1999-2003 GM-UAW National Agreement:
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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 the
eighth anniversary of the Effective Date of the 1999-2003 GM-UAW National
Agreement (x) due to Financial Distress fails or refuses to provide post-retirement medical benefits to eligible Covered Employees retired from Delphi, or
(y) due to Financial Distress reduces the level of post-retirement medical benefits
for eligible Covered Employees retired from Delphi below the level of benefits
which, at that time, GM is providing to its UAW-represented retirees:
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GM shall guarantee such retired Covered Employees post-retirement
medical benefits at the level and scope in effect for UAW-represented
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 UAW-represented retirees. |
d. In the event that Delphi or its successor company(ies) on or before the
eighth anniversary of the Effective Date of the 1999-2003 GM-UAW National
Agreement (x) due to Financial Distress fails or refuses to provide post-retirement life insurance benefits to eligible Covered Employees retired from
Delphi, or (y) due to Financial Distress reduces that level of post-retirement life
insurance benefits for eligible Covered Employees retired from Delphi below the
level of benefits which, at that time, GM is providing to its UAW-represented
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 UAW-represented 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
UAW-represented 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 on or before the eighth anniversary of
the Effective Date of the 1999-2003 GM-UAW National Agreement receive
pension benefits at a level below that called for in any applicable Delphi/UAW
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 UAW-Delphi 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 UAW-represented 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 UAW-represented 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 UAW-represented hourly retirees of GM.
As used herein, the term “Financial Distress” means a risk affecting Delphi’s continuing financial viability. The UAW cited companies
with which they have a bargaining relationship as examples of the type of situation they are concerned about when referencing Financial
Distress. The parties also discussed a significant drop in credit rating, reorganization in bankruptcy, and a qualified opinion
by Delphi’s auditors regarding Delphi’s prospects as a going concern and agreed that these types of circumstances are non-exclusive
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.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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