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Detroit Unions Challenge City’s Bankruptcy Claims

Several unions representing Detroit city works and retirees challenged Detroit’s claim for bankruptcy protection. The challenges were filed Monday in U.S. Bankruptcy Court in Detroit, the court which will determine if the city is eligible for bankruptcy protection.

AFSCME Council 25 said the city has not proven it is insolvent and has not negotiated in good faith with its creditors. Its challenge also said Michigan's emergency manager law, which enabled Detroit to file for bankruptcy on July 18, violates the state constitution because the law does not explicitly protect retirement benefits for public workers.

It also challenged the constitutionality of Chapter 9 of the federal bankruptcy code, which governs municipal bankruptcies, arguing that it encroaches on states' rights.

The UAW, Operating Engineers (IUOE) Local 324 and SEIU Local 517 filed similar objections with the court. The Retired Detroit Police and Fire Fighters Association and the Detroit Retired City Employees Association, which collectively represent about 70% of the city’s approximately 21,000 retirees, also objected.

Kevyn Orr, the city’s so-called emergency manager appointed by Michigan Gov. Rick Snyder (R), has called for “significant cuts” to pensions for some 21,000 retired public employees—with average pensions of about $19,000—and cuts in benefits and likely wages for current city workers.

While the unions have urged Orr to negotiate possible solutions, Orr claimed in a recent court filing that “further negotiations with all of the city’s various stakeholders are impracticable.”

Meanwhile, AFSCME President Lee Saunders told MSNBC’s Chris Hayes that Orr is “attacking the people who have served the city well…for 30, 35, 40 years.” 

 

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If their pensions are reduced, they won’t be able to pay for health care. They won’t be able to buy prescriptions. They won’t be able to put food on the table. They will lose their homes. We’ve got to fight any attempt to attack workers, to attack retirees who have given their lives to the service of the city.

Saunders added:

We are not saying that there is not an economic crisis. In Detroit…what we are saying is don’t scapegoat workers.

See the video excerpt above and watch the full interview.

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