Could Delphi's bankruptcy be a strategic long-term move by the parts maker? According to
, 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
, as a union strike would affect the automaker as well as Delphi.
More analysis can be found at the link.
[Source: Business Week]