Posted on 04/01/2006 6:30:51 AM PST by harpu
GM, Bondholders and Unions Attack Parts Maker's Plan To Shed Jobs, Contracts...UAW Threatens 'Long Strike'
Delphi Corp. filed a radical reorganization plan that includes closing or selling most of its North American plants and slashing as many as 30,000 union and salaried jobs. The move sets in motion a power struggle as Delphi, its labor unions, and its largest customer, General Motors Corp., seek advantage in the auto-parts supplier's bankruptcy-court proceedings.
Delphi also threw a big wrench into the restructuring plans of its largest customer, General Motors Corp., filing a motion to void more than $5 billion in contracts to supply auto parts to its former parent, saying: "We cannot continue to sell products at a loss." As expected, Delphi also filed a motion with the U.S. Bankruptcy Court in New York to void its labor contracts and retiree benefits for its 34,000 union workers and 12,000 union retirees.
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Delphi, GM and the UAW last month agreed on an early-retirement and buyout program that could push about 13,000 hourly workers into retirement and transfer 5,000 back to GM. Delphi is hoping to trim its hourly ranks further by offering employees not eligible for early retirement the same offer GM employees are getting -- in essence, $140,000 for a worker with 10 years of seniority to walk away from the company and $70,000 for those with less seniority.
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(Excerpt) Read more at online.wsj.com ...
In everything I've read about GM and Delphi, I've never heard one reference to GM's customers... Maybe there is where the problem lies...
The CEO of Delphi mentioned that they can't stay in business when they pay the lawn mower guy $64 an hour.
He was not kidding.
I have no problem watching them go bankrupt, along with GM, as long as when they are don, the lawn mower guy gets $10 an hour.
And the guys that screw bumpers on a truck get $12.
Unions SUCK!!!!!!
Partly. Another part lies in the fact that despite the high salaries they are offering their union set up makes it hard to attract and hold good workers.
Would you accept a job where the guy next to you goofed off all day and would never be fired, would always make just as much as you did and, if he had been hired the day before you, would always be preferred over you?
Another is the excess of employees they must use. In my company, (also union) when a machine goes down a mechanic is sent to fix it. Because their jobs are so specialized Delphi or GM would have to send four guys. Each would do their little part in opening the machine and then stand around waiting while the problem was fixed and then each do their little part of close it back up.
The whole system is meant to maximize the time and personal spent to do a job. So a repair that would cost my plant maybe $50 in labor will cost them $300.
The corrupt labor unions continue to sink the free enterprise system and the workers of the country by their throat hold on Federal Labor Laws.
I know when I worked at GM many of the specialized rules were done away with. However, the problems for Delphi is fundamentally the cost of labor (wages & benefits) which currently is over $75 per hour (3x above supplier average).
So closing 20 plants assuming 1,000 employee per plant will trim about $3 billion per year in labor costs alone.
What customers?
Delphi is simply telling it like it is and leting the chips fall where they may. When times are good weak managemnt lets the unions have whatever they want and just pass the costs on to the consumer. Typical of leftists, when the shoe is on the other foot, the unions refuse to reciprocate.
No different than Democrat politicians. They always want tax increases but never give any back when times are tough.
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