Delphi files for bankruptcy
 

Here's the story

http://news.yahoo.com/s/nm/20051008/bs_nm/autos_delphi_bankruptcy_dc

This makes me wonder if this will have an effect on the automotive biz in general...

I am a supplier to Delphi so yeah, it will have an impact on everyone associated with them. Part of the problem is that the UAW membership refused to negotiate to keep the company afloat. Now, I hold management responsible just as much. As a manager myself, I am accountable for our district meeting goals and budgets. If we don't, I take the heat from the C.O. Of course, the guys that work for us are thankful to have jobs and not like some UAW members who feel they are entitled to high wages because Delphi or GM owes them. PPPHHHTT!
They closed Buick down, didn't they? Dumba$$!!!!
If they close plants or downsize, I will have to lay a few of my employees off for sure.
You guys that don;t live in a UAW town might not understand what I am getting at. Those that do, will.

Damn Wayne, sorry to hear this. The old ripple effect. Back in 1980, when the envrionmentalists, through political activity, pretty much shut down our forests, both the plywood & paper mills of this small town closed...the town was changed forever. The Delphi bankruptcy is bound to hurt many good people.

And you wonder why the Toyota company management smiles all the time........

I'm from the Detroit area, and my grandfather was a UAW steward. My idea about unions has changed completely in the past 10 years. At this point I view them as organized criminal outfits who's only goal is to shake down the workers.

And when thousands of people lose their jobs, will the a55holes who are pulling six figure incomes at the union headquarters lose theirs? F-no they won't. Scumbags.

Well said, harddrive. Whether it's the UAW, Teamsters (who are self-destructing anyway) or the Teachers, modern unions are a bunch of no-compromise extorting leeches who will demand the world, and usually get it, until they destroy the employer. Then, when they have sucked the company or agency dry and it fails, it's the employer's fault for "mismanaging" things.

I think we will get a response from Superman shortly, explaining that the UAW was just trying to help Delphi out by running it into the ground.

We are a nation wide supplier to Delphi as well. Now I understand why their numbers began to really fall off about 2 months ago.

It was inevitable. I'm expecting the same thing from other auto-related companies in the near future. Pretty scary, if you ask me.

If Union members would only get it together...I mean, when strikes happen, and the membership doesn't get paychecks? What if the union leadership didn't get paychecks as well? I suspect the negotiations would then become more honest...
More and more in the past, with smaller biz operations, you'd see ownership close the plant over caving in to union demands that would result in the same thing happening anyway. It was bound to trickle up to "big biz" sooner or later...the old straw that broke the camel's back.

Unions are not ONLY issue!
 

While unions of late are not viewed in positive terms,they do have a purpose to protect their members & provide assistance in other areas than wages.I work for a Canadian Co. that purchased the original Procter & Gamble Soap Plant known as Ivorydale in Cincinnati.This was a major divesture of assets & employees for a minimum outlay from the purchasers.These "outsourcing" ways do help companies increase profits,but at the cost of decent jobs & wages.The thing that caught my eye in the Delphi article was the request from the company to reduce wages from $27 to $10-12 per hour! If that is accurate,that is over a 60% cut in pay!!!Could anyone here take a pay cut like that?I'm not a manager but a technician that does what a manager used to do.I make about $23/hr,have not had a raise in over 5 yrs. & am told that holdovers from P&G make too much $$$$.Our bottom managers make 100K+,but you never hear about them taking pay cuts or benifit cuts.Corporations of all kinds are out of touch with reality.If there are not decent wages in manufacturing,the middle class is doomed to dissappear,them all that will be left will be your management class @ $100K & the worker class @ 25K-35K.Hard to live a decent life on those kind of wages.Even with high skills & service time of 15-20 yrs,they keep telling us we are only worth $16/hr tops!!People do become accostomed to a life style of sorts,rich & poor,just hard to swallow when it is always the little guy that gets to "sacrifice" for the good of the company.Take a look @ what Delta took back from their maintenance people last year to keep the Co. afloat & it still didn't help.

Chris

If factory workers were making $27 per hour, it is no wonder that the company is bankrupt. You can certainly blame that on the union. Pigs get fat, but hogs get slaughtered.

Flintstone,
So your opinion is that factory workers are not worth $27/hr?These are people that produce things that we use everyday,work rotating shifts,miss lots of family functions etc,etc.What would you think would be a fair wage to give up these types of things that most normal people take for granted.Someone has to do it or import everything!

Chris

NO. They are not worth $27 an hour when there are people in China willing to make the same part for $2 an hour.

And it is a HUGE dis-service for union leaders to LIE to their workers and tell them that they can earn those kind of wages.

We ARE importing everything, and its ancient history. The union leaders are playing a sick game making people believe its 1950 and they have some kind of entitlement to a job.

So following that logic,only executives & such deserve to be paid generous sums for the work they do & people without the means to go to college & would enter the real world after graduating from high school should be happy making $10/hr for the rest of their lives?I guess they can take the pay cuts then go get some foodstamps & government assistance so they can keep the lights on & food on the table!
Not saying that unions are great,but companies & workers need to be on the same page when it comes to services that employees provide for said company.Just b/c someone will work for $2/day in China,does that mean we should do the same?

Chris

Heard a forklift operator was making $80k a year working for an auto supplier. Sorry, he does not deserve $80k per year when a dock worker for a shipping company makes $15/hr tops in the South.

Everyone, top to bottom, needs to suffer at Delphi.

I sell fork lift batteries to GM plants as well as Honda plants and the difference in philosophy between the plants is amazing.

At the GM plants they have long-timers who literally sit in the battery room waiting for a truck operator to drive in to have his battery changed out. 60-70% of his day is sitting behind his desk reading the newspaper or chatting with his friends. The one fellow was bragging to me that he "earned" more than $100K due to his senority and the amount or overtime that he worked.

At the Honda plants the lift truck operators are trained to change thier own batteries and can do so in approx 5 minutes.

Just one tiny area illustrating why GM is struggling.

From AP news:

"Delphi is required to pay GM [UAW] wages of $27 an hour.... That's double the level of competing suppliers, according to S&P ratings services."


So, no, economically speaking, these workers are not worth $27. The only reason they get it is through union extortion.

Clearly they are not worth $27 per hour. In cases where a typical relatively unskilled, uneducated employee makes $27 per hour, unions clearly have embarked on a course that will not allow the company to succeed on a long term basis. Union members should realize that they are giving up job security for short term, higher wages. Unions are a victim of their own success. When the company does well, it blackmails the management into excessive wage and benefit concessions. Then when things are tough, they are not about to cinch their belts and by then, members have come to believe they somehow deserve to make 2 to 3 times what other workers are willing to do the same job for. Unless union employees are 3 times as productive as others or the company only makes a product that enjoys some sort of protection or monopoly, there is always someone who will produce the same or better for much less money. Not just outside the US, but almost anywhere in "small town USA". That is the problem with unions. Usually they prevent the company and its employees from teaming to make a good product at competitive price.

Face it, almost everyone works long hours, rotating shifts, miss family functions, etc. Most folks on salary probably work close to 60 hrs per week...and earn less than $27 per hour if you divide their salary by hours worked.

If you used similar rationale for food service employes, it would cost you 20 bucks to buy a burger at the McDonalds drive through at night or or on the weekend. The same is true for grocery stores, gas stations, farm workers, etc. As long as union workers are willing to pay 3 times as much for everything they buy, paying them 3 times as much for equally skilled work would make sense. But even that would not work unless we closed the border to imports.

If the Delphi workers were actually earning/worth $27 per hour, there would be a long line of companies competing for their skills..and Delphi bankrupcy would mean nothing.

I heard a disturbing bit on Portland area talk radio...the conservative host, Lars Larson, was on a jag about school spending in Oregon. It seems that for every $100 of school spending, $23 goes to P.E.R.S. (Public Employee Retirement System) THE OREGONIAN, (suprisingly, since it's bias is liberal)
ran a front page story on teacher retirements. The front page pic was of a couple, both teachers, lounging by the pool of their Sun City, AZ retirement complex. Both of them in their early 50's, enjoying a combined retirement pay of over 6 figures. Oh, free health, dental, and vision care as well. Yep, the taxpayers of Oregon are generous to the members of the teacher's union. :rolleyes:

One other part of the problem at GM/Delphi is the jobs bank.
They have around 20,000 company wide just sitting on their butts collecting checks for 40 hours, waiting for an opening.

My company does the vending for most of the GM/Delphi plants in Mid Michigan. My father-in-law retired two years ago from Delphi. in Flint. They were closing the alternator plant down anyway. His pension MAY be cut about in half. This probably won't affect him but I can understand how, for some others, it will be detrimental to their way of life.
Tomorrow should be an interesting day in the plants. :rolleyes:
I am sure I will get "requests" to lower our prices because of the troubles.
BTW--I know that not ALL of the Delphi employees are jacka$$es. Unfortunately, they have the biggest mouths.:p

Ok folks here you have it. This gentleman is a striking example of what has happened to America. He actually believes the guy tightening the lug nuts on your rental Lumina should make $27 an hour. He not only believes it but is comfortable defending it as a practice in public.

I don't know whether to laugh or cry, but either way I rest my case.

I, too heard that Delphi wanted to lower the pay to around 15.00/hour.
It is true that most of the hourly UAW employees make around 25-27.00/hour. Throw in a bit of OT and these guys can easily make 80-100,000 a year.
Back in the 70's, our employees made the same per hour as GM. As the ecomony here in Michigan started sucking, ours made consessions and allowed pay freezes to keep their jobs. GM did not and in fact demanded more pay each year even as the sales tanked.
Night all,

Lendaddy & others,

I am NOT saying that every Factory worker should make $27/hr.My point is that it is not JUST the union involved in the cost for which are negotiated into some contracts & agreed to by the Company management.And NO the less skilled labor SHOULD be paid accordingly.My problem with crying that is is the unions fault exclusively!If you look at the shareholders annual report of most companies closely,executive & upper/mid managment salaries,benefits has far out paced the workers who actually make the products.For example,A.G. Lafley(CEO) of P&G was paid $2.8 million in salary,awarded close to 25,000 stock options @ exercise price of like $12/share(value of almost 1.4 million @ todays share value of $56/share),and had some $1.8 million put in his retirement account.So his total compensation for the 04-05 fiscal year was around $6 million for the year.If the stock value goes up(historically about 6-7%) that increases in value also.I know he works hard & oversees a large & getting larger company for which he is paid hansomely!If just seems that it is always the liitle guys that end up taking the hit when things go bad.The execs,upper management have many other options that are not available to us,the factory stiffs.I myself have 15 yrs with my company,can & do run every packaging line on the floor,mechanical skills(only 1 other on my work team)that I use daily and also have machining skills but don't use that often due to subbing these type of thing out usually.I am currently a Team Leader which entails all admin function to my team,plus anything that happens and requires any or all of the above skills.

SO YES,I FEEL I AM WORTH EVERYBIT OF THE $23/hr I AM PAID!
I do more on a daily basis of making this company $$$$ than just about any of the managers above me that I report to that DON'T HAVE A CLUE,about how things work or what it takes to make a bar of soap(Yes, I work @ a soap plant).These guys pull down in excess of $100K and work only 40 hrs/week tops.

So Lendaddy,I don't know what case you made except that a guy tightening lug nuts on a rental Lumina isn't worth $27/hr,which I would agree whole heartedly.But those are NOT the people I refer to.GM & Delphi have done this to themselves with the help of their unions.But a blanket statement that factory stiff aren't worth decent $$$ is very short sighted in my opinion.

Oh HAHA,you are totally correct about GM's LEGACY COSTS! That one line item is what may eventually put GM under.

Chris

good post

Chris? So, you're the reason my bars of bath soap get smaller & smaller? Used to be 5 oz. bars..then 4.5, now 3.75? Pretty soon, I might as well go to motels to pick up my shower soap...the smaller the bar, the harder is is to hold onto...I'm with you! It's management decisions on bar size, so they translate smaller into more profit? I'd pay more for bigger bars, but I'm one of those who can pick up a basketball with one hand... Yeah, I know...P&G leadership listens to you about as much as they would to me. Also, I miss the scent of Lifebouy!

Business is simple. It is not so much of "how much" you do, but rather how much what you do is worth to the company's bottom line. If the work that you produce is worth as much or more than you are paid, you will always be employed. If you are paid too little, you will be hired away by another company due to your value. When you require more pay than you produce in income to the company...you will not be employed. It is simple and works almost perfectly until you involve unions. It is a bit more complicated with union employees because they must be considered as a whole ...so if the majority/unit does not produce more value than they cost...all must go.

Of course managers make more money than rank and file employees....and of course they probably do not know how to make soap. That is not their job. If they were doing the work of the hourly employees, they would be cheating the company and shareholders. They are paid too much to make soap when they can find plenty of folks to do that for much less money than they are paid. Any manager that can keep a company making a profit in spite of a union workforce deserves every penny they are paid. They keep your company out of bankruptcy.

pwd72s & fintstone,

Know what you mean about smallers sizes/same price,that is how most are increasing profits now.Also adding lower cost fillers & such to maximize profit.
Suprised you know that our bar soap used to weigh 5oz., now 4.5oz.Very observant!
Lifeboy was before my time.We currently make Zest,Olay,Safeguard,Camay with others on the way soon.We are taking on Colgate production as a contract manufacture in Dec.Feel bad for the employees in KS City where are closing plant.This is what we went through 3 yrs ago when P&G sold us,lock,stock & barrel to the Canadians that own the plant now.One of the Canadian owners just sold his share for about $11 million to a investment firm that buys & hopefully expands to keep us here.He didn't have to put up any $$$$ when they bought us.Pretty good return,yes?
We are the largest bar soap plant in the world with yearly production of about 4 million cases!

And you are correct that P&G never would listen to suggestions from the peons on how to make things better.That's what they paid the enguneers $150K/yr to do!About 14 of them just for our plant before they sold us.Then the mechanics & machinist that actually worked the floor would modify to do what it should have done in the first place!!!!!

Oh well,such is life! Just kind of rubs me the wrong way that some feel blue collar workers are not worth a decent wage.Thats why I'm doing everything in my power to see my kids go to college so they at least have a shot at not being degraded for being blue collar.One of the reasons I bought my Porsche was to enjoy working on it!I can use my brain very well,But like working with my hands even more!Nothing like the feeling of firing up that rebuilt motor/trans etc.,that you did yourself!Almost anyone can whip out there checkbook & buy/pay to have stuff done or a whole car for that matter.Personally would not,but thats me!

Fintstone,my point about the managers not knowing how to make the soap,didn't mean they should actually work the lines.but that they only seem to be protecting THEIR existance by pilling paper work & some system or another on the rank & file that doesn't really add any value to what we do.Sometimes makes it harder!!If they don't at least understand the process,how can they make knowledgable decisions on what is important or not.Very frustrating at times to say the least.

Chris

First of all, it depends on how you define "decent wage." $27 per hour is more than just a "decent wage." Of course engineers would expect to make significantly more than a person who did not spend 5-10 years in college in one of the toughest curriculums possible. Not only does the non-graduate get the extra working years, but they did not have to pay for the education. If the salaries were the same, only a fool would ever go to the effort.

To look at it another way, would you be comfortable if everyone else from the cook at McDonalds to the cashier at the grocery store made the same $20+ per hour and passed the cost on to you? Would you buy the $25 union burger or would you cross the street for a $2 burger at Burger King...knowing McDonalds would soon go bankrupt?

Of course union members will accept as much pay as the union thugs can negotiate....but once again, the expectations of long term employment are certainly effected once they cause the goods they manufacture to be priced where they cannot compete with other similar products. Remember, the folks who have to buy those union products typically do not have the same union wages.

Yes, the union has been putting a strain on the company, but the executives don't seem to be afraid of bleeding the company either.

From an article on the bankruptcy:

The rest of the article is here:
http://biz.yahoo.com/ft/051009/fto100920051551062426.html?.v=1

Of course the people being "screwed over" the worst, by both the unionized workers and the executives, are the shareholders.

DPH is about 83% institutional owned; you know these "shareholders" couldn't care less since they own DPH with "other people's money." Did you see the way some of the big analyst firms "upgraded" DPH last week? Crooks! If you own a mutual fund, check and see if they owned any DPH shares last week. If they did, get your money out of their hands immediately.

Competentone,
you seem to understand my point that managment still will take "their"cut of the pie,as large as they can stuff in their mouth" even when things are going down the tubes.

fintstone,
You still think that I am saying everyone should be payed union scales,cooks,cashiers etc.Please reread my posts.My point remains that when things go bad,it is the workers that take the hit in the end.Manufacturing base in U.S. has shrunk in last 20 yrs mainly due to corporate greed of ever increasing profits to justify ever increasing executive/management compensation.I make $23/hr,pay $120 every check for health insurance,which by the way is a very minimal plan,FED,SS,STATE,LOCAL taxes,then try to fund my 401K so I might be able to retire by the time I'm 65 or so.I send my kids to public school & try to give them a better life than I had,but am not rich from making my $23/hr.Sometimes I wonder if people are blind to the fact that cost of living raises are common to just about everyone.Where I work,we have not had ANY increase going on 5 yrs.When & how much was your last raise?Not complaining,but you know the old row about "walking a mile in someone else's shoes" don't ya!Even at what I make we live a very modest life,put most of any extra money in investments or our home.

On a side about enguneers,most I have dealt with in our plant could use a few years in the real world to enlighten them on how things work and perform.Just because your sliderule says it will work,doesn't always match reality!

Chris

No, I am not saying that at all. I am just trying to point out how high wages make your products...or anyone's...less competitive in the marketplace. If after nonlabor costs (materials, facilities, etc), a person's work only makes the company $20 each hour he works, if his salary is $27...the company will soon be bankrupt.

Companies that are forced to deal with unions are not allowed the natural wage-setting effect of supply and demand...and as thus, are typically out-of-kilter with the actual value of the work performed. .. hence the example of the burger guy making $27 per hour and selling $25 burgers. He would not be able to sell them at that price and soon his restraurant would have to close. But I guess the big paycheck would be good while it lasted.

No one faults you or anyone else for making as much money as you possibly can. You may well have special skills, I don't know. The point is that labor is generally not worth $27 (Delphi)per hour and companies that pay that much for labor are typically not able to compete very long when the same labor can be had for less than half that elsewhere in the US and a fraction of that in other countries. Regardless of how much you resent the large incomes of management, it is generally just a drop in the bucket compared to the rank and file of a large company....sheerly because of numbers.

The manufacturing base has shrunk because of union wages...and little else. Companies exist to make a profit..not provide jobs or charity. As long as they make a profit, they continue to exist. When they do not, they are either moved or restructured so that they can make a profit...or closed. It is simple as that. Apparently Delphi wages exceed their revenues.

The Delphi $27 per hour equals over $56000 per year. Pretty darned good for a 40 hr week. Most folks I know work at least 60 hrs per week. At that rate, they would make about over $98000 at Delphi (if over 40 hrs per week are time and 1/2). Many salaried college graduates that I know with 20 years experience make much less than $56000 and work at least 60 hrs per week. In fact, most folks I know with graduate degrees and PhDs make less than the $98k.

I agree that taxes take a huge bite from your paycheck (and everyone else's). You can thank your union for that too. They are first in line to send your union dues to help elect political representatives from the party of more government and higher taxes.

My company supplies quite a bit of workholding to their manufacturing facilities. We, along with many machine dealers have actually stopped selling them new product as a result of Chapter 11 looming. Or we adjust our terms to get cash up front.....but as many suppliers know....that's a tough thing to do with a company like Delphi.

Lets wait to see what happens in the next year. I hope the US makes the right decision....to begin protecting all these American manufacturers. If not....we're all in for one big kick in the pants!!!

The company I work for (special machine design and build), quit quoting jobs for Delphi Sandusky years ago as their "quote, requote, requote" policy was just getting ridiculous. These guys wanted the world but would not pay for it. We actually used to have to build their machines such that a lazy employee could not easily sabotage it. These bone head operators would get their machine to fault then sit and do nothing as they waited for a proper union repairman to come and clear the fault. Unbelievable!!!

Chris,

Your attitude is classic. I mean that your thoughts are common among the rank and file everycompany USA. "Maybe if the CEO didn't get that big raise we have X or Y".

The fact is: No you couldn't. You simply are unable to think in scale and hence your outlook is flawed. P&G has what...100k employees or so? So that means if the CEO made $0 instead of $6m a year you could each get a $60 a YEAR raise!!!1 Whooo Hoooo Doggies!

Now keep in mind how you guys ***** about his compensation and its effects on the bottom line yet don't see why the "stiffs" can't get a $0.78 cost of living raise. This works out to: $165,000,000 + shared taxes and Medicare of $9,900,000 for a grand total of 175 MILLION DOLLARS!!!!!!!!!

Suddenly the CEO's salary seems unimportant and miniscule huh? Guess why.....because it is.

Edit: Or you can look at it this way....

P& G can pay a very high salary in an attempt to court a top CEO to steer their multi billion dollar corporation, OR they can give you guys a $0.03 an hour raise. You read that right "Three cents an hour".

Face it - you just like dropping it...

Be careful with that, it's called preferential treatment and they(lawyers) may come back at you for that money. It happened to us:(

GM stock falling...Monday morning. Pretty predictable...

It's called negotiating terms. And we do it all the time. No way am I going to expose $50K to a company that may or not be able to pay. In our line of business, custom designed fixtures, you have to negotiate terms. I understand some cases you can't by law....but it ours it's fine as far as we understand it.

Nice part is, anything ordered after Chapter 11 is guaranteed to be paid! :D We have a $50K job right now that is pending.....guess we'll see what happens.

We thought we were in the clear as welll, so be careful that's all I'm saying.

Private (non public utilities) unions are experiences huge mmembership losses, and IMO they are headed for exticntion. At one time, they had a true purpose, but now........

I was an IAM machinist at Boeing at one time.