• Feb 7, 2009
If you thought things were looking bleak at General Motors, perhaps you should take a peek at Delphi, the parts supplier that spun off from The General in 1997. It declared bankruptcy in 2005 after the revelation that its poor financial position was being masked by irregular accounting practices. Delphi has yet to emerge from bankruptcy and now says that its value has fallen to the point where it may be unable to pay back the debts it has amassed since filing for Chapter 11.

Sounds pretty bad, no? It gets worse. The supplier has filed paperwork with the court asking for permission to end health care benefits for retirees that had been salaried employees. This move could be made as early as April, after which current Delphi employees would no longer be eligible for health care benefits after retiring. If approved, Delphi says this move would save $70 million per year and free up over a billion dollars in liabilities.

[Source: Detroit Free Press]


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  • 37 Comments
      • 5 Years Ago
      1. This has nothing to do with unions.

      2. This is a great example of why we need universal health care in this country. It's time to get with the 21st century and catch up with the rest of the modern world and remove this burden from domestic companies.
        • 5 Years Ago
        Justin, Canada still has a priority on Medical Research, with incredible breakthroughs happening at our Universities, like the UofA, quite regularly. That's a pretty thin argument. And yes, if you're greed is more important to you than a cure that would save millions of lives, then that choice would be evil. Sick and twisted and selfish. Besides, when was the last time you ever heard of an acting physician (with a practice) make a medical breakthrough? That usually happens at research labs, which are not funded by UHC.

        The cap on salary is there to keep our Universal Health Care on a sustainable budget. Really, if money is why you got into medicine, then you can get the hell out. But this is a case of policy, not Universal Health Care itself. You don't need to have a salary cap to have UHC. Another thin argument. Why is it that a doctor needs more than a quarter-million dollars a year again?
        • 5 Years Ago
        Love how you people identify universal health care with twenty first century descriptions. It has nothing to do with going forward or moving into the future. And this post does have everything to do with unions, because without unions, this business wouldn't be in such financial disaster, like most businesses without unions.

        Secondly, take a deep breath and think, would you really invent the cure for cancer or aids if you know you will not become a billionaire out of it in a universal/socialistic health care society? If I invented the cure and know I am not going to be able to profit out of it because of social medicine, I rather destroy it, and no, it would not be evil.

        In Canada, under our superior twenty first century universal health care, we have a 250,000 a year salary cap for doctors, because apparently making too much money is evil. Guess what, all good doctors went to the USA, and we have a doctor shortage. and I laughed, because people in Canada deserver to suffer under what they voted for out of class warfare bitterness, socialism.
        • 5 Years Ago
        Justin- So it would not be evil, in your mind, to destroy a cure for AIDs because you could not profit off of it??!

        Wow....
      • 5 Years Ago
      Why should Delphi pensioners, who are arguably least able to take the hit and sustain themselves, have a lesser entitlement than other creditors?
      • 5 Years Ago
      If I were Obama I'd sign an executive order opening up the Federal Employees Health Benefit Program to everyone...at cost. The cost is clearly identified, OPM negotiates and various vendors bid every year. Now, the Feds pay roughly 72% of the cost for federal employees, the employees pay the rest; active duty feds pay their share out of before-tax dollars.

      So...let Delphi and their retirees into the FEHBP; Delphi can pay 72% and the employees/retirees the rest.

      Yes, this would be less than the current UAW plan...but that is pretty outrageous anyway. And the cost would be less than the current UAW baloney.

      And, O yes, apply it across the board to all Delphi employees...including the executives.
      • 5 Years Ago
      Clearly...what the business model was or is...doesn't work. Welcome to the world of all the other businesses, small or large that go under. Go out of business and let a profitable company, union or non, take over the quickly shrinking market for GM based parts/support.
      • 5 Years Ago
      Love how you people identify universal health care with twenty first century descriptions. It has nothing to do with going forward or moving into the future. And this post does have everything to do with unions, because without unions, this business wouldn't be in such financial disaster, like most businesses without unions.

      Secondly, take a deep breath and think, would you really invent the cure for cancer or aids if you know you will not become a billionaire out of it in a universal/socialistic health care society? If I invented the cure and know I am not going to be able to profit out of it because of social medicine, I rather destroy it, and no, it would not be evil.

      In Canada, under our superior twenty first century universal health care, we have a 250,000 a year salary cap for doctors, because apparently making too much money is evil. Guess what, all good doctors went to the USA, and we have a doctor shortage. and I laughed, because people in Canada deserver to suffer under what they voted for out of class warfare bitterness, socialism.
      • 5 Years Ago
      These comments are showing me how little Americans really know about Universal Health Care. They think they know a lot, and have lots of scary scenarios, but the fact is the system simply works, and policies are not dictated by Politicians.

      And Dan, when I'm a father of two (and in the coming years will be of four) working is already an obligation. Supporting the economy makes my job an obligation. Supporting my Government, municipal or federal, makes my job an obligation. UHC won't change that, and it won't make working life any more of an obligation than it already was.

      There are some absolutes in this world. There are classes. Most people toil their lives away to support a system, service an economy, so a few can sit back and have life taken care of for them, at great comfort. Systems like UHC help to close the divide between these classes.
      • 5 Years Ago
      I don't get this notion that a service should not cost anything. Take a look at how well Massachusetts universal health care is doing and than make a decision. Hint, its not all rosy and neither are the other countries that are doing it. Why do so many of you want the government to take care of you???? If you are that reliant go live in countries that have socialized programs and quit trying to change this one.
      • 5 Years Ago
      So what would be the implications if it went so sour for Delphi they had to close? Could GM function without them? Do they also supply parts to other manufacturers (since they've been independent for a while now), or are they GM suppliers only?
        • 5 Years Ago
        GM couldn't function without them. Ford has indicated they couldn't either.
        • 5 Years Ago
        That's not good. So I assume that means Delphi would ultimately be bailed out, either by the federal government or Ford and GM, as much as they need to be bailed out in order to keep GM and Ford going. At least until the point where they were willing to let GM and Ford go down the tubes with Delphi.
      • 5 Years Ago
      how many millions do they give nascar teams again?
      • 5 Years Ago
      The second you make healthcare a right, you make me going to work every morning to pay for your healthcare an obligation. That's repugnant.

      The attempt to disconnect payor from patient is exactly why the current system doesn't work. People spending strangers' money don't give a damn about prices, insurers paying for strangers' healthcare don't give a damn about quality of care. That's human nature at the most basic level.

      It's unsustainable. Treatments get more complex, the population gets older, the retiree:worker ratio increases, costs can, have, and will only go up. It will collapse. For badly managed companies who made the most promises it is already collapsing.

      Transferring that burden to the federal government doesn't fix that. It passes the buck to the same people who run the awful public schools, awful public housing, awful public transportation, and pays for them by mortgaging the future to foreign bond holders.

      You trust those people to run your doctor's office?
      • 5 Years Ago
      Let's not lose track of what this means. People who worked all their lives now face losing the health benefits they were promised in their retirement years when they need them the most. This is completely wrong and should be stopped. It is cowardly for companies like this to pick on their retired workers and their widows.
        • 5 Years Ago
        RIGHT ON! THIS WAS A BENEFIT THAT WAS PART OF THE DEAL WHEN THEY WORKED THERE. WHETHER SOMEONE THINKS THEY WERE OVERPAID OR NOT IS NOT THE ISSUE. A DEAL IS A DEAL. THIS IS DONE BECAUSE RETIREE'S HAVE NO WAY TO IMPACT THE COMPANY AFTER RETIREMENT. THESE PEOPLE SHOULD BE PROSECUTED FOR BREACH OF CONTRACT, AND PUT IN JAIL. NO, I NEVER WORKED FOR GM, OR ANYONE ELSE WHO PAID RETIREMENT HEALTH BENNIES. I KNOW A RAW DEAL WHEN I SEE ONE.
        • 5 Years Ago
        Yeah, or they could go out of business because of paying them and then what? They still lose them.
      • 5 Years Ago
      My problem here is that Delphi has just asked the bankrupcy court for permission to end health care benefits. I haven't read anywhere that the court has agreed to this. However Delphi has notified the salaried employees that it is terminating health care effective 1 April. Does this mean that Delphi has the bankrupcy judge in their hip pocket and already have permission to act.

      And yes we need a National Health Care program to releive business of this expense, just about every other industrialized country has. This is the biggest reason we aren't competative, it isn't the unions.
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