DETROIT (WWJ) – The leaders of Detroit’s police and fire unions say current workers will be devastated by the cuts being proposed by Emergency Manager Kevyn Orr in his “take it or leave it” plan of adjustment for bankruptcy.
Jeffrey Pegg, President of the Detroit Firefighter’s union says it’s a lose-lose situation.
If they reject Orr’s plan, he told WWJ Newsradio 950’s Stephanie Davis, their members’ retiree benefits will be reduced by 40 percent. That drops to 32 percent if they accept the deal.
Either way, cost of living adjustments go away, according to Pegg.
“How are we going to be able to recruit firefighters and police officers. How are we going to be able to retain firefighters and police officers, when we’re saying, ‘You guys are gonna start at $14 an hour?’ And your pension benefits are going to be far substandard, and you’re not gonna get Social Security benefits,” Pegg said.
The 120 page plan, which was filed in federal bankruptcy court, makes cuts to pensioners and creditors while offering a blueprint for the city to emerge from the largest municipal bankruptcy in U.S. history.
Orr has said that his plan is best for Detroit and all parties involved, but Pegg disagrees.
“To be realistic, we’re going to have members destitute as a result of these cuts,” Pegg said. “… What is this going to do to the citizens of Detroit? What is it going to do to the city of Detroit for that matter?”
If the deal is rejected, $816 million generated by the Detroit Institute of Arts, philanthropic foundations and the legislature to soften the blow on pensioners would be off the table.
Creditors have until June 30 to vote on the plan.
Orr filed for bankruptcy on behalf of the city last July, estimating the Detroit’s debt at at least $18 million. The city hopes to exit bankruptcy by Oct. 15.