Wednesday, November 23, 2005

Meanwhile at Delphi

The Detroit News carried an interview with Delphi CEO Robert S. Miller today. A few things that he said needs to be commented on.

We are in a Chapter 11 bankruptcy process. The fundamental reason is we have labor costs in our North American facilities that are double or triple what our U.S.-based unionized suppliers (competitors) pay. That is a difference that is unsustainable.

I agree with statement completely, but I think it needs to be said that management too is overpaid, and that too is unsustainable. If their hourlies get their pay cut in half, they're still making more than I am, doing basically the same thing I am.

We have made the proposal of $12.50 an hour and what we figure is $8.33 of benefits for active (workers). And that would bring us to $21 an hour. The point of this is that it is in line, though higher than many, in line both on base wage and benefits with the people with whom we compete. We've indicated here that many of them have the same unions that we have.

I too am UAW (and not very proud of it) and this will put them and us in the same ballpark with them still slightly ahead.

Frankly, I don't know how to go to a total above $21 an hour without that being a plan to obliterate (Delphi) because we won't be able to compete for new work.

I don't know how they made it as long as they have. Of course I would like to make more, but there is this strange concept called reality. It is catching up with the auto industry and it is time for the management, the unions, the employees, the retirees, and the taxman to face reality.


Blogger Crazy Politico said...

you make some great points in your responses to them. I'd like to see companies like Delphi, United, etc. suspend bonuses, etc, for management when they go into Chapter 11. However, like your UAW pay, a lot of the management folks have contracts, and goals are sometimes part of them. The goals, though are usually in pieces sold, stuff like that. If they were based solely on profitablilty, it would be better.

6:59 PM  

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