Detroit automakers commit $26 mln to aid bankrupt city's retirees
June 9 (Reuters) - Detroit's three automakers said on Monday they had committed $26 million toward $100 million pledged by the city's art museum to save its collection from being tapped to raise cash for Detroit's historic bankruptcy.
Under a so-called grand bargain, the Detroit Institute of Arts (DIA) would contribute $100 million to ease pension cuts on the city's retirees and avoid a sale of art works to pay city creditors. Philanthropic foundations have pledged about $366 million and the state of Michigan would make a lump sum payment of $195 million.
The $26 million from the automakers consists of $10 million from Ford Motor Company Fund, $5 million from General Motors Co, $5 million from General Motors Foundation and $6 million from Chrysler Group LLC.
As part of the grand bargain, ownership of the DIA's collection and assets would be transferred from the city to the private nonprofit corporation that currently operates the museum. The Detroit City Council on Thursday unanimously voted to support the transfer.
Detroit's workers and retirees must still vote on the city's plan to adjust $18 billion of debt and exit the biggest municipal bankruptcy in U.S. history.
Shirley Lightsey, president of the Detroit Retired City Employees Association, spoke at the DIA event announcing the car makers' commitment, urging retirees to vote "yes" on the ballots they need to send back by July 11.
"You cannot eat principle," she said.
City unions and the Michigan attorney general have contended that the state constitution prohibits the impairment of pension benefits for public sector workers. But city and state officials have warned that if members of Detroit's general and police and fire retirement systems reject the plan, the money from the grand bargain would go away and retirees would face bigger pension cuts.
Starting on July 24, U.S. Bankruptcy Judge Steven Rhodes will conduct a confirmation hearing on the plan to determine if it is fair and feasible. (Reporting by Karen Pierog, additional reporting by Ben Klayman in Detroit; Editing by Tom Brown)
- Obama makes rare campaign trail appearance, people leave early
- Turkey to let Iraqi Kurds reinforce Kobani as U.S. drops arms to defenders |
- Obama makes rare campaign trail appearance, some leave early
- Nigeria declared Ebola-free, holds lessons for others |
- U.S. stocks end higher despite drag from IBM