Sunday, October 09, 2005

Uh-oh!

I'm no business guru, but this can't be good.

This is already been broached in the comments section in the previous post, but here we go...
I would love to have opinions on this, even from those of you who read but don't comment (you know who you are!). Just this once, I would like to hear from any and all who read this.
There is a very real chance this scenario will befall GM workers like myself next.
I'm not complaining, just noting a fact. For those of you who REALLY hate unions and union workers, please try to keep your glee to an acceptable level...

Thank you in advance for your thoughts on this matter.

jimmyb the CUG


From Wood TV Ch 8:

Delphi seeks pay cuts, plant closures from United Auto Workers

(Troy-AP, October 7, 2005, 9:44 a.m.) Delphi is asking the United Auto Workers union to agree to a wage cut of more than 50 percent and to elimination of pay for laid-off workers.

It's part of the auto supplier's effort to stave off bankruptcy.

A letter from UAW leaders in Kokomo, Indiana, says Delphi is asking the UAW to accept a cut in wages from $27 down to $10 to $12 per hour.

The letter says the Troy-based company also is seeking to eliminate a jobs bank that gives full pay to four-thousand laid-off workers.

It says Delphi also wants to reduce health care benefits and vacation time for its hourly workers as part of a restructuring deal.

A Delphi spokeswoman is declining comment on the request

I don't care who you are, if your pay was cut %50, you will be hurting (unless you're like M. Moore or Oprah).

And then (from the Seattle Times):

Delphi files for bankruptcy:

DETROIT — Delphi, the nation's largest auto supplier, filed for bankruptcy yesterday, sending shock waves through a U.S. auto industry weakened by high labor costs and falling market share.

The bankruptcy is expected to result in plant closures and layoffs. The company made its filing in Bankruptcy Court in Manhattan under Chapter 11 of federal bankruptcy regulations, which provides protection from creditors. Delphi's non-U.S. operations were not included in the filing.

Miller, a restructuring expert who was hired in July, had threatened to take the company into bankruptcy if he failed to reach agreement with Delphi's former parent, General Motors, and its largest union, the United Auto Workers (UAW). Miller set a deadline of Oct. 17, when U.S. bankruptcy laws are scheduled to change.

UAW officials blasted Delphi's decision to file for bankruptcy one day after sweetening the severance packages of 21 top executives to help persuade them to stay at the company.

Delphi said it made the change after determining its severance package for top executives was not competitive.

When GM spun off Delphi in 1999, the automaker agreed to pay health-care and pension benefits for Delphi retirees in the event of a bankruptcy filing within eight years. Financial analysts have projected this provision could cost GM $6 billion at a time it can ill afford more problems.

But Delphi also blamed its spinoff agreement with GM for saddling it with high labor costs. Under the agreement, Delphi is required to pay GM wages of $27 an hour to most of its 24,000 UAW-represented workers. That's double the level of competing suppliers, according to Standard & Poor's Ratings Services. Delphi also had to pay full wages and benefits to 4,000 laid-off workers in job banks, which cost it $400 million each year.

Delphi also has been plagued by an accounting scandal that the FBI and the Securities and Exchange Commission are investigating. Six people have resigned because of the investigation, including Alan Dawes, Delphi's former chief financial officer.


I know this will invite much union bashing (I get plenty, believe me), but please also try to add something constuctive, if you would be so kind. This is a multi-faceted problem, and cannot be laid soley at the feet of the UAW.

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