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.
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]