Delphi dumping unprofitable contracts with GM
It's been a year since Delphi filed for Chapter 11 bankruptcy protection, and the supplier is still trying to find ways to return to profitability. One of the things it's identified as a way to get back into the black is ridding themselves of unprofitable contracts with General Motors. They have been quietly shifting some of these orders to outside firms. One example is the contract for GM full-sized pickup truck steering knuckles that recently went to EaglePicher Corp., which is no stranger to Chapter 11 itself.
Delphi also dumped the contract to build catalytic converters for GM's new pickups, which still had three years on it, according to UAW Local 1866 president Skip Dziedzic, in Milwaukee. No firm has been identified in taking over that order yet.
Besides shifting some of these unprofitable parts-making contracts, Delphi is also offering thousands of hourly workers early retirement, with GM's financial backing. And Delphi also wants to unload eight of its 29 U.S. factories to focus on more profitable electronic components.
A total of 5,472 unprofitable GM parts contracts are being let go as part of the restructuring, but General Motors is trying to block this plan. GM itself, however, has been actively shifting some Delphi contracts to other suppliers, as well, such as in the case of Siemens VDO Automotive Corp. making the manifolds for GM's new large SUVs, slip control systems for Epsilon cars from TRW, and four separate suppliers to make spark plugs: Denso Corp., Beru AG, NGK and Honeywell International Inc., all of which were previously produced by Delphi.
[Source: Automotive News, sub req]
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Reader Comments (Page 1 of 1)
Jamie 9:04PM (10/09/2006)
The UAW may yet see all its jobs go down the drain.
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Lithous 9:54PM (10/09/2006)
Hmm. With all the self professed capitalist on autoblog and no takers? No one wants to show GM how it is down? Money to be made and no one here up to the task? Surely Steve Jobs (who apparently reads autoblog) is up to the task of making some parts for GM, he could even make every part iPod compatible.
But all the parts would be made in China if Apple made them and then TheLiesAboutCars would be all over GM more than they already are for GM's Chinese made parts. Wait, I know, speaking of those car guys over there, why don't they get some of GM's contracts (instead of Apple or any other company). I know they would never make any of the parts in China, no way. The day TheLiesAboutCars guys would make parts in China is the day Tesla Motors would make a motor in Taiwan. I mean, TheLiesAboutCars guys and the Apple guys are so American, they wouldn't never make a part in China like the evil GM. I know for a fact (by the way they talk) TheLiesAboutCars could make any part GM needed, right here in America and profitably.
5000+ contracts, any takers from all you uber efficient capitalists?
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Jamie 10:15PM (10/09/2006)
Lithous, nobody cares about the UAW. They are not even required to come to work on time. So of course they'll get railroaded by China.
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Poleaxe 10:44PM (10/09/2006)
Anyone have a Lithous-to-English dictionary?
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beanspants1 11:01PM (10/09/2006)
this is a sad story from a purely business managment perspective. The story goes something like this:
in the '70s and I guess early '80s, the US manufacturers went to japan to study their automakers, with the quality circles and other mgmt jazz. what they found was that each japanese manufacturer had way fewer suppliers and really close relationships, where basically they could count on the parts being the same, and could theoretically handle quality issues on the front end rather than the recall end. it was a huge difference - something like Ford had over 5,000 suppliers, where honda had 20.
ford & gm both came back, narrowed their supplier totals, and formed their own supply companies to manage the mess. however, the larger contracts had obvious problems== the threat of bankruptcy and insolvency of a major supplier causing disruptions for the auto company being a primary one. widespread quality issues being second, if the quality issues don't get addressed on the front end.
seems that both of these have come to pass, which to some degree is destroying management theory. so basically, when the theory falls apart, and the merging of suppliers never created the synergy it was supposed to have done...well, then you have an opportunity to form a small upstart auto supplier. or you could just let the indians and chinese do it, and you could form a capital management company to help them out.
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dakota 12:08AM (10/10/2006)
"They are not even required to come to work on time."
Prove it.
From what I've seen, their contracts state that there is a starting time and an ending time.
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BoB G 1:49AM (10/10/2006)
O.K., so you bought a japanese car. Years from now will your grand-child buy a car made by the Taliban? They both invaded our shores.
By the way the UAW scans a badge for time keeping.
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S. L. 8:58AM (10/10/2006)
#7 Heres the deal. The people in WW2 are for the most part dead or in an old folks home. They are not making cars and they are not running factories etc. So if the grandkids of the Taliban are by then peaceful then yes people would buy them because the grandkids of the Taliban would have no responsibility for the sins of their grandfathers. After all should reparations be paid by decendents of slaveholders to decendents of slaves? No one here unless you are really old was a victim of WW2. No victims, No villians No heros. The people over in Japan now are not the same people who attacked us then.
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Lithous 10:57AM (10/10/2006)
"The people in WW2 are for the most part dead or in an old folks home. They are not making cars and they are not running factories etc."
So it is just about those people? They fought and some died for themselves and not the country? Not to make a better life for us (their future generations)? Do you realize that what they (those dead/retirement home people) did affects your life (whether you are American or not)? The Nazis wanted to share the world with Japan (and then get rid of Japan obviously). I guess what ever way of life won out, as long as you made a little chunk of change, then everything is A OK.
"So if the grandkids of the Taliban are by then peaceful then yes people would buy them because the grandkids of the Taliban would have no responsibility for the sins of their grandfathers."
So, if they decided the best way to get the Americans back is an economic war, one their gov't monetarily supports, then we should help them out in any way we can, right? I mean, we saw how a country can become crippled by economics (the Soviet Union) so why should we be so dumb to think economics can't destroy us? We have no real plan to do anything against a country like China which fixes things in their favor.
"After all should reparations be paid by decendents of slaveholders to decendents of slaves?"
Well, it does happen. Minority contracts are given out. Minority scholarships. Etc. But are the Africans that gathered up the slaves in Africa and handed them over to the Europeans and North Americans and made some coin off of doing so going to pay reparations as well?
"No one here unless you are really old was a victim of WW2."
I wonder if you feel a rape victim that it is her problem and not the communities problem? Maybe the victim should go investigate the crime herself. Or another thought: nothing your grandparents did, ever, affected your life, right? Whether they were rich or poor or abusive or whatever, right? You don't think the guy who killed the Amish girls, that his children are victims? They have to grow up with some nasty stuff over their heads. You think only the WWII guys themselves were affected by WWII? Give me a break. Do you understand basic things and how they work? Seriously.
"No victims, No villians No heros."
Yeah, no memorials. Great way to handle such a tragic time in history. Just block it out.
"The people over in Japan now are not the same people who attacked us then."
Well yeah, because we won't allow them to have weapons now. But they haven't tried to take us economically with dumping of TVs and products and 1% loans from their banks for Japanese companies to help take over industries. Their generals are just their execs that have shown to be arrogant of late. What did Bruce Lee call it, the art of fighting without fighting?
I don't think we need to being battling any tank or missle wars, I think we need to wake up and realize other countries in the world are trying to take as much of our economic pie as possible. Once we realize that maybe we can actually start competing again. I've stated it before, Mr. Land from the Polaroid company had patents numbering second only to Edison and now the company doesn't make a single thing which competes on technology (actually it is only "Polaroid" by name only). That is called, the whole country is not competing. We are too busy thinking the world is there to help us and not looking out for themselves.
But send me a pair of your rose colored glasses maybe I'll see the perfect world you do.
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S.L. 10:31PM (10/10/2006)
Lithous You are entitled to your opinion but you are taking my coments out of context. I'll try this again there were of course villians and heros and victims in WW2. However, people trying to equate people living now who were born after WW2 cannot be equated with the victims, heros and villians of that time. Henry Ford was one of the biggest racists and pro nazi's of his time. However that has no bearing on the current Ford family or the ford company by the same token equating WW2 injustices commited by people of Japan has no bearing as the people in Japan now are not the guilty parties. Their parents and grandparents were the guilty parties. The heros of the second world war are also the parents and grandparents of people in this country. But going back to the original post. The curent Taliban have committed horrible attrocities and acts of war against the current generation of Americans. Of course no Americans of this current generation would buy cars from them but if in the future the decendents of the current Taliban are peaceful then the future generation of americans who were not attacked by the taliban would be willing to buy their cars. You have every right to carry a grudge against people that were not directly responsible for WW2 even if you were not there. However, if you wonder why other Americans don't, well I've tried my best to explain
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Lithous 7:30PM (10/10/2006)
Why look at it as a grudge because one chooses to remember history and make decisions based off of it? I don't dislike anyone personally because of where they are from, I'm just not going hand over a job to them if I don't have to (for one of many reasons: they don't pay taxes to help build my schools and roads). Isn't that why the EU was formed to keep/bring as much power to Europe as possible? You think they don't protect like every other smart entity which has constructed borders before it? I'm just not going to trust another country and their people to look out for my country's well being. As long as Americans pay their taxes I can count on them for contributing something to my families needs.
I have friends but I don't let them come over and do what they want, there are limits. Why is it bad to even say, "they are our friends but they can't have everything" or we can't hand over this industry where we have lots of jobs without a fight? If the fight can't be won by making the better product everytime then it might be to take it upon ourselves to buy our product when it is good enough for what we need but not necessarily the best. When it is better some day then we saved it from not existing and if we think that doing that will make lazy Americans then why won't it make lazy Japanese (or Chinese eventually) when they have destroyed all other players and there are a handful of only Japanese making a particular product in the world? We have to be somewhat alert and somewhat knowledgeable of what is going on around us, past and present, to make better decisions about the future. Japanese companies are run by the Japanese (borders are up). Even VW is partly state owned. Why do other countries see the advantages of not throwing things away or giving up control but we don't?
When Germany and Japan and the rest give up the idea of citizenship and borders then maybe I will believe that we won't be one of the few standing there dangling while no one else took the dare to drop 'em. Anyway, do people think the EU was created as a country club or as a means to better compete with the U.S. economy? At what level of education does anyone teach that the EU is there to help Europe do better than us economically and China is fixing their currency and therefore if we want to keep our standard of living these are the things we must be aware of and this is what we should do? I see we are going to gamble that it all works out and we have a little bit of the pie all the time.
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Koba 2:00AM (10/11/2006)
Well, it's a good start. Now all GM needs to do is be free to dump all their unprofittable employees.
And world trade isn't fair, never was, never will be. I've made peace with the fact that people are selfish Lithous, I have no preference as to their national allegience.
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