For starters, I do occasionally get things wrong. The H2 was a success, there were good reasons for killing the 4th gen Camaro, Ford didn't stay rich enough to buy GM, and Iraq was a mistake.

But with the Delphi saga, I've gotten it wrong pretty continuously.

I first saw it as the poster child of what happens when a union runs amuck. Rigid job descriptions, pay that's better than big city police departments (who really earn it. A willingness to see the company crash taking their jobs with it. It was obvious that if Delphi crashed, it would take GM with it, potentially throwing the country into a serious recession due to the domino effect of the car makers and the businesses in the country that are directly or indirectly depended on the auto industry. The public outcry would be direct to and would demolish the UAW, and the UAW would have only themselves to blame. The fallout would force Congress and an out of touch President to enact real fair trade and perhaps be forced to enact some measures to give our industry some breathing room.

Then the more I looked at it over the months, the more I realized how off base I was.

Delphi management did zilch to cut costs, and they more than anyone else saw and knew this point was coming. They made no effort to cut costs or deal with the labor issue they say is the cause of all their problems. They gave themselves huge bonuses as the company bled money, then attempted to force workers to take $10 per hour... something anyone can get outside of a fast food cashier.

GM, already scrounging for pennies to finance Zeta and lay off 30,000 people, was faced with a long, bankruptcy threatening work stoppage due to no parts, or mediating Delphi management's screwups. GM was FORCED to go in and fix things.

Now, GM's been involved for, what? 1- 1 1/2 months? And came up with an agreement that is fantastic for both GM AND the Delphi (and GM) workers via a buyout and early retirement package.


I'm not the brightest guy on the planet, but I don't think that Delphi execs woke up one day less than a year ago, and realized it had been losing huge money the past number of years, it's stocks were in the sewer, and that their labor costs were outta sight. Delphi should have been negotiating years ago if they were that bad, or at least brought up the issue with the UAW and worked for a solution before. Not giving themselves bonuses at the same time they were forcing pay cuts would have been wise.

In the end, GM came in and seemingly made shortwork of this. Making an offer to buy out workers and offer early retirement actually is going to help GM alot, as well as fix Delphi.

On one front, I was right. I said the UAW would never be the same again. In this deal, the UAW takes a hard hit in membership, and will never recover. But it provides more job stability to those who are left, and by moving towards agreements on flexible job rules, may actually stablize their losses.

We always copmplain or complement GM on it's vehicles. This time, I think GM got it right. And it has nothing to do with cars.

Now, if they can fire Delphi management and simply take over Delphi again, it would be great. Afterall, GM did fix the company they screwed up.

 

So what you are saying is that its Delphis fault the Camaro wont be out till after 2007?

 

Another thing to take into consideration is that the old Delphi management was corrupt and they are no longer with the company. Being in Dayton at the time this was going on was interesting because you got to hear all the news that was not in the media. Everyone was sleeping with everyone else and taking helicopter rides to work and such, they could care less about cutting costs.

The new guys, while I do not know how much they are making, inhereted a mess and it might be a little premature to throw them under the bus.

 

I have to disagree with you when it comes to the back-patting. You have to remember that the reason Delphi is on this position in the first place is because of GM. GM thought they could just spin off their problems and they would go away. WRONG!
Sure, Delphi had a few years to "right the ship," but how the hell were they supposed to accomplish this with a union that didn't want to come to the table? They also never had near the cash GM does to parlay such a buyout endeavor. Delphi management could have done more, but they simply couldn't have fixed this situation on their own.
I will agree that they saw it coming, and simply gave themselves bonuses and golden parachutes. That is criminal in my opinion. I'm sure that had an effect on the union's willingness to negotiate as well.
I wish the federal government would take off the blinders and look more than 2 years down the road. The manufacturing industry (and thusly the long term stability of the entire country) is in a 20-25 year tailspin with no signs of coming out of it. Something needs to be done and quickly. Unfortunately, I have no idea who will be able to do it...

/rant

 

inhereted a mess and it might be a little premature to throw them under the bus. LOL, you mean Truck or Bus.

You are absolutly right Chuck. The management spent unGodly amounts of money. FYI, new employees started out in the 9 dollar range and went up from there. For you guys that don't know that ='s 3rd tier.

 

That is the problem with big companies. Eventually, everyone wants to bleed it dry.

Many of the executives don't have the guts to stand up to the union for the sake of the company, so they give in to unrealistic demands. They were not stupid all those years, they knew their decisions would eventually cause a breaking point to be reached. But all they cared about was giving the impression that all was well, so they could keep their high-paying prestigious executive jobs and keep stealing huge bonuses for a 'job well done'. So they cave in, give the unions what they want. Besides, what do they care if the company goes broke? It's not like they are personally paying out of their pockets. They will have millions tucked away, and will probably get other executive jobs.

Many of the employees are too short sighted to see that their demands may one day cause them to lose their jobs. They can't be happy with the fact that their job already places them among the better paid in society, with great benefits to boot, sometimes for relatively unskilled labor. Every chance they get, they want more.

 

I'm convinced that Delphi was a union busting maneuver from the start. Take a high-cost, money-losing unit of GM and spin-it into a separate company. Now force that company to compete against low cost suppliers. They never had a chance.

The only problem with the plan is that Delphi self-destructed sooner than the GM geniuses expected. Was the Delphi Management dumb for sitting on their butts? Hell no. They were given a bag of crap by GM, and by doing nothing, it's now GM's problem to clean up. If Delphi goes down, the shareholder lawsuits are going to be brutal.

 

Is it true that if Delphi suceeded and lasted longer after splitting with GM, then GM would not have to be responsible for the obligations they have now with Delphi worker wise under the contract?

Seems to me Delphi going under before the GM obligations were up would be the only move they could do. As mentioned earlier , there is no way in hell Delphi could compete long term against competition with it's current structure.