June 9 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
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)