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A couple interesting Delphi quotes...

Jason E

10-17-2005, 01:45 PM

From today's Wall Street Journal:

1) From an interview with Steve Miller, Delphi's CEO: "And Ron Gettlefinger (UAW President), I wouldn't want to be in his shoes for all the tea in China. He's going to have to help half a million workers get used to the idea that globalization has taken away the ability to have someone who mows the lawn or sweeps the floor to get $65/hr (including health and retirement benefits)"

2) An article titled "Why Delphi's Asia Operations are Booming:" "He (Choon T. Chon, Delphi's VP of Asian Pacific Operations) has been explaining the bankruptcy filing of the U.S. operations to his staff and customers by likening Delphi's Asian operations to the children of a sick American mother. "Our mother has a tumor. This tumor is the UAW," he says, referring to the powerful United Auto Workers union that represents 25,000 Delphi workers and 10,000 retirees...."We know hat she's going to come out of the hospital very well," he says, referring to the U.S. company's Chapter 11 status.

A couple observations...

1) When considering things such as free health care, $65/hr all-in benefits (more than I make right now with an MBA!!!!) and job banks, likening the UAW to a tumor is positively brilliant.
2) With the all-in cost of a Chinese worker costing Delphi $3/hr, guess where more U.S. manufacturing jobs are headed???
3) Why are people mowing lawns making so much?
4) Steve Miller is VERY sympathetic to GM's situation for a couple reasons. First, obviously GM is over 50% of their business...if he screws them, he screws himself. Secondly, he has faith in Rick Wagoner. I said that just so if BM is trolling, he can blast me on that one :D Thirdly, he recognizes GM has a significantly tougher situation than Delphi, saying his company is in more urgent need of restructuring, but recognizes GM's crushing pension and health care problems...I think Delphi will work with GM as much as possible, based on the tone of the article.

This wasn't meant to be a UAW bashing thread, but when things like the above still exist, what gives???? Last week I read about a guy in the job banks that was laid off in Baltimore, and was still paid while volunteering all summer for the local park service!!!! WTF??????????????

And a lot of you wonder why GM can't get cars out faster? They've trimmed white collar so much, I don't think they have enough design staff to get this stuff out! Granted, there is still too much corporate fat, but where it needs to be (R&D, styling, etc) I bet its getting real, real thin...

kick Z tail out

10-17-2005, 01:55 PM

Here's are some Delphi quotes:

"You're fired"

"Clean out your desk"

"In Asia they do this stuff for $2 an hour"

;)

Jason E

10-17-2005, 01:57 PM

Something tells me you didn't get those from an article :D

kick Z tail out

10-17-2005, 02:10 PM

Something tells me you didn't get those from an article :D
No you're right... Those quotes came from my 'sources' in Michigan... :D ;)

falchulk

10-17-2005, 02:49 PM

detltu

10-17-2005, 02:49 PM

Here's are some Delphi quotes:

"You're fired"

"Clean out your desk"

"In Asia they do this stuff for $2 an hour"

;)
If only it were that easy.

CLEAN

10-17-2005, 05:40 PM

Not sure if this made the WSJ or not...

http://www.usatoday.com/money/autos/2005-10-17-delphi-execs_x.htm

Or this, taken from Ed Wallace's column...

While Delphi’s new CEO, Steve Miller, was offering his workers as little as $10 an hour to stay, he’d already negotiated a huge settlement package for himself and 20 other executives — “in case they are let go or retired due to the company’s problems.” A Delphi official said their old executive package “wasn’t competitive.” And 10 bucks an hour is? Just another inequity: “competitive pay for employees” means Chinese wages, but “competitive pay for executives” means untold millions more.

Smith and Miller will never have to sign up for food stamps or be served an eviction notice — but you and I as taxpayers will likely wind up paying for the pension plans of Delphi’s workers, all the while blaming laborers instead of management.

WERM

10-17-2005, 06:12 PM

Here's are some Delphi quotes:

"You're fired"

"Clean out your desk"

"In Asia they do this stuff for $2 an hour"

;)

This is what they do for the white collar workers...

Jason E

10-17-2005, 10:47 PM

30thZ286speed

10-17-2005, 11:13 PM

I haven't read to much about the Delphi bankruptcy or the other threads on the subject, but what effect if any will this have on XM Radio since Delphi makes a large portion of the XM recievers? It seems XM is going strong, they just recently past the 5 million subscribers mark. I wonder how many of those 5 million have Delphi related XM equipment?

Over the weekend I just picked up the Delphi MyFi, what a awesome little reciever for XM.

graham

10-18-2005, 12:27 AM

Question.... Is UAW to thank for foriegn outsourcing at GM?

Jason E

10-18-2005, 11:35 AM

Quite possibly. If wages were around $15/hr instead of $27/hr, and health care had been realistic for some time (I work at a small regional bank that makes $350 million a year, and I STILL pay for almost 30% of my health care!!) instead of free, and retirees were going through MediCare instead of GM, uhm yeah...I'd say the exodus to China, while possibly inevitable, sure would have been slower.

HAZ-Matt

10-18-2005, 12:55 PM

Quite possibly.
If our standard of living was lower or if we didn't have as many rights in this country we wouldn't have seen outsourcing either :)

Eric Bryant

10-18-2005, 08:44 PM

This is what they do for the white collar workers...

Bingo. To the folks with an expensive college degree, sitting at a desk right now, I have this to say - you're next. Or rather "we're next", since I happen to fall in that group, too. If anyone wants to compare UAW labor costs to those in China, well, then we might as well mention that an engineer who makes $60K in the USA can be had for $5K in China. Maybe all this glee over what's happening to the UAW is simply some sort of mechanism to help some people from facing their own destiny.

Welcome to the Race To The Bottom.

grossesexy

10-18-2005, 08:46 PM

Anyone see that Steve Miller will only be paid 1 dollar until they return to profitability? Was in the paper today.

Jason E

10-18-2005, 11:42 PM

Eric,
I keep arguing to my co-workers that our job (Commercial Credit Underwriting) could be outsourced in a heartbeat. They disagree. I'm waiting for the day...I'm hoping with my Masters, I can get up the food chain far enough that one day, the same doesn't happen to me.

The only way to avoid it is to be in a service business where Americans will actually need to, you know, interact with you. Otherwise, without a doubt, it is the ultimate Race to the Bottom...I 100% agree.

Jason E

10-18-2005, 11:44 PM

detltu

10-19-2005, 01:24 PM

Bingo. To the folks with an expensive college degree, sitting at a desk right now, I have this to say - you're next. Or rather "we're next", since I happen to fall in that group, too. If anyone wants to compare UAW labor costs to those in China, well, then we might as well mention that an engineer who makes $60K in the USA can be had for $5K in China. Maybe all this glee over what's happening to the UAW is simply some sort of mechanism to help some people from facing their own destiny.

Welcome to the Race To The Bottom.
The only thing I have to say about this is the white collar workers have been losing their jobs for quite some time now. Not because of outsourcing but because when the company has to make job cuts and the union guys have a contract preserving their jobs the engineers are the next to go.

detltu

10-19-2005, 01:26 PM

By the way, FWIW I do not take glee in this. I am happy for GM because they desparately need a break. But taking pride in watching fellow Americans lose income is not the way I operate. Many people, both here and at work, criticize my choice to buy American products as often as possible, saying "who the hell cares?" more or less. They'll care when its their job outsourced...
I agree 100% I would love to see the union workers get what they want but I think it is better for everyone to sort these things out now so that there will be a healthy company for Americans to work for.

poSSum

10-19-2005, 01:51 PM

There seems to be a lot of focus on union jobs moving to China. I think this is just as much about union labour doing the work for the same pay that non-union Americans are doing it for at other companies.

I'm just guessing here, but I'd think that GM, Ford & DCX would be happy to provide the same wage and benefit packages to their employees as the transplants do to theirs.

falchulk

10-19-2005, 03:00 PM

WERM

10-19-2005, 07:46 PM

90rocz

10-19-2005, 09:48 PM

2) An article titled "Why Delphi's Asia Operations are Booming:" "He (Choon T. Chon, Delphi's VP of Asian Pacific Operations) has been explaining the bankruptcy filing of the U.S. operations to his staff and customers by likening Delphi's Asian operations to the children of a sick American mother. "Our mother has a tumor. This tumor is the UAW," he says, referring to the powerful United Auto Workers union that represents 25,000 Delphi workers and 10,000 retirees...."We know hat she's going to come out of the hospital very well," he says, referring to the U.S. company's Chapter 11 status.This kind of attitude IS the problem. Here they have a "great tool" in the UAW, but rather than seriously discuss it's utilization they'd rather use it for a scape-goat. Stereotypes and media bashing brings on a barage of Propaganda attacks.
So petty for such educated intelligent people... :rolleyes: :shame:

We're going to have to come together to compete in the emerging Global economy, the old addage is more important than ever...."United We Stand, Divided We Fall"....it's our choice....I hope we don't realize it too late..

Jason E

10-19-2005, 10:02 PM

You're a UAW member...with all due respect, you're sorta biased...eh? :)

Your union is realizing too late that $65/hr all in is asinine...period.

HAZ-Matt

10-19-2005, 11:42 PM

Ford said that for every $1.00 a US engineer costs, a Japanese Engineer costs $0.75 and a Mexican Engineer costs $0.22
So an American engineer, Japanese engineer and Mexican engineer walk into a bar...

90rocz

10-20-2005, 12:22 AM

Jason E: You're a UAW member...with all due respect, you're sorta biased...eh?
Your union is realizing too late that $65/hr all in is asinine...period.No, they see the present need to make sacrifices for the common good, but even that gets criticized huh?
I'm not nearly as biased as that "Unprotected, unrepresented" Exec that probably never put in a day's labor in his life, is...judged by his own words.
Guess it depends on what side of the tracks you were raised... :shrug:
$65/hr (including health and retirement benefits)"so many variables...maybe they made a poor choice in health care providers??
What is the Exec's hourly wage plus benefits and options worth??
Twice that..probably.
But, I forgot, a UAW worker works with his hands, therefore his minial labor is of little worth....
Let's just continue pointing fingers of blame, and see where that gets us...
I don't work for GM, BTW...

90rocz

10-20-2005, 12:50 AM

The Oracle of Delphi
Steve Miller's vision of the post-bourgeois workforce.
By Daniel Gross
Posted Tuesday, Oct. 11, 2005, at 12:02 PM PT

On Saturday, Delphi, the giant auto-parts company, filed for bankruptcy, kicking off what is sure to be one of the great cram-downs in American history. In a series of interviews with the New York Times, the Wall Street Journal, and the Financial Times, Delphi CEO Steve Miller offered unionized workers a choice: They can accept pay cuts of about two-thirds or face the termination of their pension plan, which is underfunded by several billion dollars.

Miller, whom no one will confuse with the Gangster of Love, has performed similar drills at bankrupt industrial companies like Bethlehem Steel, Morrison-Knudson, and Federal-Mogul. And the experience has given him some insight into the forces transforming the industrial world, leading Micheline Maynard of the New York Times to dub him the "Oracle of Delphi." As he told the Financial Times, "Delphi is simply a flashpoint, a test case, for all the economic and social trends that are on a collision course in our country and around the globe."

When he ruminates on the dialectics of global capitalism, Miller calls to mind a famous, simplistic big thinker with prominent facial hair. No, not Tom Friedman—Karl Marx. Because what Miller is talking about—and the effort he's been engaged in at companies in the steel and auto industries—is the re-proletarianization of industrial work.

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Transforming masses of unskilled, insecure industrial workers into middle-class stakeholders was a key achievement of the U.S. economy in the 20th century. Henry Ford introduced the $5 day in 1914 as part of a larger effort to make his hourly workers—many of them immigrants and minorities—think and behave more like respectable middle-class Protestants. In the following decade, the spreading belief that better-cared-for workers would prove less susceptible to unionism, socialism, and communism led to the advent of welfare capitalism. Through the New Deal and the Cold War, the grand bargain between government, industry, and labor held fast. With pensions and paid vacations, factory work became a ticket to the middle class, providing home-ownership and comfort, job and retirement security, health care, and leisure. (Where I grew up—in mid-Michigan in the 1970s—it was not uncommon to find Oldsmobile workers playing golf at public courses.)

In recent decades, however, this grand bargain has collapsed slowly—and in the case of Delphi, all at once. There's plenty of blame to go around: clueless managers, atavistic unions, and indifferent politicians. Broadly speaking, the United States has collectively decided that certain industries, like electronics, are not worth keeping. Other industries, like meatpacking and chicken-processing, are worth keeping, but only if they're staffed by a new proletariat—immigrants who labor for low hourly wages and without benefits or union representation. And now we're being told that other industries like steel, coal, textiles, and auto parts can survive only to the extent that middle-class stakeholders choose to become insecure industrial workers.

To be sure, Miller is right that broad forces like globalization, free trade, and the emergence of China as an economic power are making life difficult for U.S. manufacturers. But many of the wounds are self-inflicted. And our system has some perverse incentives that encourage smart executives like Miller to restructure at the expense of workers.
Once Miller arrived on the scene in July, it was clear that he was going to drive Delphi straight into Chapter 11. He had little in the way of stock, and his reputation wouldn't take a hit if Delphi failed. Taking companies in and out of bankruptcy is what he does for a living! What's more, Delphi, which was spun off from General Motors in 1999, faced intractable structural problems. GM essentially spun Delphi off so it could get auto parts for less than it costs to make them. And when raw-material costs spiked, Delphi couldn't pass on its higher costs to its main customer. So, Miller didn't try that hard to restructure outside of bankruptcy. According to the Wall Street Journal, Miller's last offer to the United Auto Workers union was a 75 percent wage cut. (In Delphi's defense, the $65-per-hour compensation it had negotiated with its UAW workers was clearly unsustainable.)
The beauty of Chapter 11 is that it allows companies to walk away from so many obligations to lenders and employees. If the UAW doesn't come across, Miller can ask the court to impose salary changes. Or he can toy with the notion of kicking the underfunded pension onto the increasingly feeble shoulders of the Pension Benefit Guaranty Corp., which Miller did at Bethlehem Steel in 2002. Delphi says it may be able to save the pension plan, but only if workers accept a two-thirds pay cut—wages and benefits of $20 per hour.

Now, $160 per day in wages and benefits isn't bad. That comes to about $41,600 per year. But is it enough to sustain a bourgeois lifestyle? Henry Ford instituted the $5 day because he wanted his employees to buy his cars. Back out $10,000 for benefits and insurance, and Delphi's employees may make enough to buy a 2006 Buick Terraza. But they won't have anything left over.

The United States isn't de-industrializing. Rather, many of its historic industries are getting smaller, and the jobs they offer are declining in quality. The scary thing is that this re-proletarianization of industrial work is moving up the value chain, from raw industrial materials (steel, coal) to components (auto-parts makers and textiles). Where's it going next? Higher up the value chain to the companies that make the finished products. For the Oracle of Delphi has warned that if Ford and General Motors don't heed his message, they could be next. "I am very concerned about what happens to the Big Three," he said. Miller shouldn't be too concerned, though. GM or Ford could be his next gig. :think:

90rocz

10-20-2005, 01:03 AM

If Miller is serious about change, he should take the 63% cut across the board too, that should put his salaries more in line with Toyota and Honda counterparts, like $300K-$500K(??all in all, if cut)
(How dare working people expect 100K all in all..)

90rocz

10-20-2005, 01:13 AM

Ok, I found an article saying He WILL cut his pay to $1 per year....only until they come out of Bankruptcy.
But.....
Tech's Phony Dollar-a-Year Men
How CEOs make millions by eliminating their own salaries.
By Daniel Gross
Posted Thursday, Jan. 30, 2003, at 12:06 PM PT

Since the tech bubble burst in 2000, leading chief executive officers including Cisco's John Chambers, Siebel Systems' Thomas Siebel, and Oracle's Larry Ellison have either eliminated their six-figure salaries or reduced them to $1.

The moves seem both practical and highly symbolic. In theory, the savings help the company preserve jobs, and the CEO shows himself to be unselfishly devoted to the company, willing to bet it all on recovery. The $1 salary especially resonates now that the nation mobilizes for war. After all, the original "dollar-a-year" men were the corporate executives who quit the private sector to help the government during World War II.

But today's dollar-a-year men are practicing phony virtue. In the '40s, salaries accounted for a hefty percentage of executive compensation, and hence directly influenced the ability of a CEO to get rich. Today, the salary of a CEO is a mere pittance compared to his earnings. Many of the bosses who have forsworn their salaries are still lapping up other forms of compensation—such as options and bonuses—that divert far greater company resources. As cost-cutting, these salary cuts are preposterous. It is like a fat person who devours two pizzas a day forgoing the mushroom topping to cut calories.

In 1941, as war planning began, high-ranking executives flocked from the private sector to Washington, essentially volunteering to work for entities like the Office of Production Management and the Office of Price Administration. In a time of national conscription, Victory Gardens, and Rosie the Riveter, executives were expected to pitch in their expertise and time. The dollar-a-year men included GE CEO Philip Reed, Sears executive Donald Nelson, Ford production chief Ernest Kanzler, and General Motors President William S. Knudsen. By helping to transform the U.S. consumer economy into the "arsenal of democracy," these executives—and hundreds of others—contributed significantly to victory.

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In recent decades, dollar-a-year executives have been found almost exclusively in the private sector, particularly at ailing companies that, like the United States in the '40s, were involved in life-or-death struggles against powerful, putatively evil forces. In 1978, when Lee Iacocca assumed the helm of Chrysler, which was fighting for survival—partially against Japanese imports—he took a $1 annual salary. In 1997, when Netscape's future suddenly seemed in doubt as technology's Evil Empire—Microsoft—began to challenge its business, chief executive James Barksdale cut his annual salary from $100,000 to $1. Between 1999 and 2001, when Apple's Steve Jobs returned to rally his wounded warriors against the Microsoft-Intel-IBM monolith, he took a total of $3 in salary.

Jobs and Barksdale represent the new breed of dollar-a-year men: company founders with hundreds of millions of shares of stock leading their suddenly cash-strapped organizations through tough times. By refusing a salary, they were essentially volunteering to nurse their babies back to health. In theory, they would only gain if the stock price rose.

In practice, it's a different story. The World War II dollar-a-year men sacrificed real wealth for the good of the nation. Today's dollar-a-year men are sacrificing nothing. In part because of the way the tax code penalizes companies for paying salaries of more than $1 million, cash has shrunk as a share of overall compensation. In effect, the dollar-a-year CEOs simply traded small amounts of cash for massive amounts of options. As part of a four-year, no-salary agreement he reached with Oracle in 2000, CEO Larry Ellison—who already owned about a billion Oracle shares—received options on another 40 million. Cisco's John Chambers cut his salary from $268,131 in 2001 to $1 in 2002, but took 4 million options, half of which are exercisable at an eminently reachable $16.01.

Reducing a six-figure salary to a buck is a good tactic for billionaires who know they're about to cause real pain to others. New York Mayor Michael Bloomberg's status as a dollar-a-year man has partially insulated him from charges of insensitivity as he has raised property taxes and cut social programs to close budget gaps.

But the tactic has less utility in the private sector, especially when the dollar-a-year men aren't really depriving themselves. In 2001, when Tom Siebel slashed his salary from $1 million to $1, he exercised options on more than 3 million shares, earning more than $174 million. The cost of those options to shareholders vastly exceeded any savings from his salary cut. Economically speaking, a dollar is a dollar to shareholders, whether it comes in the form of a salary, a bonus, or an option. Or in the form of a $90 million jet. In 1999, Apple gave Steve Jobs what the company called a "special executive bonus": a plane "with a total cost to the Company of approximately $90,000,000." Apple shareholders would have been better off if Jobs were paid a huge salary instead.

Nobody will ever accuse this generation of executives of self-sacrifice. Indeed, as a class, today's CEOs have excelled at insulating themselves from risk and hardship while inflicting it on their underlings and their putative bosses, the shareholders. The only hair shirts these dollar-a-year men are wearing are made of cashmere.

grossesexy

10-20-2005, 01:15 AM

90RocZ, do you see why it bugs me so much when Bill Ford is made out to be some god among men for it? People are fooled waaaaay too easily. I find it funny he gets praise for it, but someone else does it and they get **** on for it.

Like it is any different in the end for any of these guys, they get so many perks, bonuses, stock options, severance packages, etc.

Ken S

10-20-2005, 10:40 AM

Ahh, i'm too tired to start this globalization argument again.. All I can say is, "competition can be brutal" and that can cut both ways.

Chuck!

10-20-2005, 11:26 AM

Bingo. To the folks with an expensive college degree, sitting at a desk right now, I have this to say - you're next. Or rather "we're next", since I happen to fall in that group, too. If anyone wants to compare UAW labor costs to those in China, well, then we might as well mention that an engineer who makes $60K in the USA can be had for $5K in China. Maybe all this glee over what's happening to the UAW is simply some sort of mechanism to help some people from facing their own destiny.

Welcome to the Race To The Bottom.

I'm a programer, let me tell you all about outsourcing.

Although, in the American worker's defense, the code which comes back is often terrible and bug ridden. I don't even want to look at the code which is outsourced to India, which is then outsourced to China. :no: That may change as our project managers get better though, and the Indians learn more.

92RS shearn

10-20-2005, 12:38 PM

In a recent article, Ford said that among its cuts, it would not cut its total number of Engineers. However, in the same article Ford said that for every $1.00 a US engineer costs, a Japanese Engineer costs $0.75 and a Mexican Engineer costs $0.22

Food for thought...

On that same line of thought, an Engineer in Kansas makes about $0.75-0.80 for every $1 one makes in Long Island. On the other hand the house I bought in Kansas here would cost about 7-8X more if it were there.
The Aerospace industry has been outsourcing Blue and White collar jobs for years, mainly to get plane orders from those countries, the lower cost probably doesn't hurt either.

poSSum

10-20-2005, 02:37 PM

So an American engineer, Japanese engineer and Mexican engineer walk into a bar...

The Canadian Engineer ducked! :D

HAZ-Matt

10-20-2005, 03:50 PM

The Canadian Engineer ducked, eh!
Fixed it for ya :p

R377

10-20-2005, 06:42 PM

The only thing I have to say about this is the white collar workers have been losing their jobs for quite some time now. Not because of outsourcing but because when the company has to make job cuts and the union guys have a contract preserving their jobs the engineers are the next to go.
That is very true. The big-3's white collar workforce has been slowly, and for the most part quietly, shrinking for a few decades now. When the companies needed to trim some fixed costs it's easier to let white collar workers go because there's no hue and cry from the union to deal with. One could even argue that GM's lacklustre product portfolio over the past couple of decades has been due to letting go much of their most experienced staff during the downsizing of the 80s and 90s.

As much as possible the companies try to reduce the white collar workforce through releasing contract workers or salaried attrition so as to lessen the impact. So to say that the white collar workers "are next" is not exactly true. (An interesting point: there's significant turnover/attrition in the white collar ranks because for the most part they are paid what the market deems they're worth and therefore there's a fair bit of mobility within their profession. Yet the turnover in the blue collar ranks ins't nearly as high. I wonder why?)

detltu

10-22-2005, 01:59 AM

(An interesting point: there's significant turnover/attrition in the white collar ranks because for the most part they are paid what the market deems they're worth and therefore there's a fair bit of mobility within their profession. Yet the turnover in the blue collar ranks ins't nearly as high. I wonder why?)
That is actually one of my problems with the state of the U.S. today. Nobody works at the same company their whole life anymore. There is no loyalty and people will just go where the money is. I am not saying that once you start working somewhere you should be stuck, but people seem just a little to eager to leave their job for money. My 0.02

WERM

10-22-2005, 08:57 AM

That is actually one of my problems with the state of the U.S. today. Nobody works at the same company their whole life anymore. There is no loyalty and people will just go where the money is. I am not saying that once you start working somewhere you should be stuck, but people seem just a little to eager to leave their job for money. My 0.02

Loyalty is a two way street. If the company is not going to be loyal to you, why should you forgo the additional income you could be earning to be loyal to them? By what logic would you do this? :think:

To change this, you would have to make it hard for companies to layoff people.

detltu

10-23-2005, 10:38 PM

Loyalty is a two way street. If the company is not going to be loyal to you, why should you forgo the additional income you could be earning to be loyal to them? By what logic would you do this? :think:

To change this, you would have to make it hard for companies to layoff people.
Very true.