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Could Delphi's bankruptcy be a strategic long-term move by the parts maker? According to Business Week, Delphi has only declared bankruptcy for its U.S. operations-- overseas facilities in Mexico, China and other countries are not affected. If the unions and Delphi don't reach a compromise later this year, and bankruptcy courts approve the company's request to void its union contracts, only 7,000 of the 32,000 union members would be retained. Production would then be shouldered by the overseas facilities where costs like wages and health benefits are considerably less.
Opposition to Delphi's strategy not only included union reps, but several state senators as well. Senator Evan Bayh and Representative John Conyers, Jr. have introduced new legislation to include the oversea facilities for consideration by the bankruptcy courts. But the biggest influence to the supplier's strategy may be General Motors, as a union strike would affect the automaker as well as Delphi.

More analysis can be found at the link.

[Source: Business Week]


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    • 1 Second Ago
  • 7 Comments
      • 9 Years Ago
      William Pen you irritated me, which isn't easy while tearing down the UAW. Yeah, your riight the UAW has turned the average autoworker into a whiny brat, but not all of us. yes I've heard committeemen tell UAW workers to F---the company. I don't like that. I've heard Uaw workers complain that the company has F--- them. I am an UAW worker that has always done my job and worked hard for GM. Thats the problem, the UAW didn't hire us GM did. They better figure out that what is good for GM is good for the worker.
      • 9 Years Ago
      Yea, this is old news. The unions in this country better get on the trolley if they want to have any kind of job going forward.
      • 9 Years Ago
      I thought this was the goal the entire time. Did we miss something? There is nothing a self inflicted gunshot won't cure...given you survive the gunshot that is. Great job Delphi. Just remember, once you're rid of the Unions, start triming the fat in the boardroom.

      General, take notice.
      • 9 Years Ago
      I've got news for Puff Chippy and Mike: You guys had better "get on the trolley" yourselves, because the U.S. standard of living is headed DOWN, and Delphi is just the tip of the iceberg. There isn't a single job, public or private sector, that will be immune. So, start paying off those mortgages and credit cards, boys, because you might not have the income to do it a few years from now. And don't plan on filing bankruptcy. Thanks to the new law, you'll be paying it back until you die out of your burger flipping wages.
      • 9 Years Ago
      It truly infuriates me that legislation is being drafted that explicitly tells a company how it must do business.

      It is understandable that people are concerned with the potential 20,000+ americans loosing their jobs in an instant, but isn't that what the Union is for?

      Unions are inherently self interested. Their greed and self interest has driven their wages and benefits to a level that the market cannot maintain. Now they are faced with an option: Either take a massive pay and benefits cut (not in their self-interest) OR lose your job (REALLY not in their self interest).

      Market forces will dictate what happens in this circumstance... not an act of congress ordering a single company to do business in a particular way.
      • 9 Years Ago
      It truly infuriates me that a company can circumvent labor law in the name of "increased shareholder return" without any consequence of breaking contracts they agreed to.

      If a large multinational company is allowed to only declare bankruptcy of part of the operations, not the whole operations, it makes it easy to screw over the hard working individuals who helped build the company to hoard more from themselves, and nullifies any reason for a union's existance...

      For all the union bashers, if it wasn't for their struggles, we wouldn't have 5 day, 40 hour work weeks, paid vacation, health care benefits, paid holidays, FMLA, oversight groups like OSHA, etc.
      William Pen
      • 9 Years Ago
      I work at Delphi as a contract worker. I have posted here before. Stuff is starting to happen pretty fast now, I wanted to give all an update of truth not swayed by the Union or management. These are my observations:
      The piety has gone from their faces as the reality of the economic "come-up-ance" settles around as a noxious mist of plain truth. You can see the square jaws floating around like sullen apparitions across the great manufacturing expanse. In 1999 (parties over) all knew this would be the outcome, still many piled on debt with big SUV's, pompous new houses and other financial bad sense. The sad part is the rank and file are all but unhireable, most posessing no desireable skills for prospective employers. The reputation of the Delphi worker and organized auto worker in general is less than glowing, horrible in fact ! The Union has formed them into whiny, demanding, lazy, malcontents of uselessness. They are the epitome of underachiving no matter what pablum you might be fed by the Press about them. This attitude and at 28.00 an hour, some body help me here please. They are 3 times more likely to have a Workmans Comp. claim, and a tremendous percentage of the hourly workers posess one or more of these claims. Answer yes to this question on a job application and see how fast you get hired. The Union hurt these people implying a false sense of Job Security and ruining them in the meantime.
      As I figured there is a massive campaign to hire new employees going on now at our plant with ads in the local rags expousing wages of 10.78 too 14.00. The employment offices have been inundated with applicants explained as many thousands. There is product to be made here. The products we make are in demand, just unprofitable with the current bloated compensation packages and other management malfesience.
      Most hourly EE's I talk with that are elligible are electing to take the buyout, there is a large percentage of these folks, probably 60 % of the total hourly people. What is really sad is the prospects for the salaried employees. Standard severance pay and probably no pension, sadness doth prevail here !! Another sad scenario is the loss of stock, many EE's hourly and salary, motivated by happy management offering incentives, purchased a helluva lot of Delphi stock through the years which is now absolutely worthless, some saw this as their life savings---now dashed against the corporate rocks !! A lot of people lost a ton of money and are maddern' heck.
      There is a sense of limbo here with no one knowing whats really going to happen about anything except maybe the buyouts. Myself being a contract worker I just continue to come to work not being told anything about my employ, for months it's like, "We'll let you know if we hear anything" a real smoke and mirrors show. Hopefully being contract will be beneficial in this scenario not considered one of the real Delphi EE's (whom are about to be offed). "Goodbye Mr. Goodbar", goodbye Union, goodbye fossilized middle class. This plan ain't gonna stop with Delphi--mark my words !!! Thank you William Pen