Saturday, June 23, 2007

A Strike Averted?

It would have been a total disaster for the struggling US automakers. A strike at Delphi would have had a ripple effect that would have first stopped GM, and then gone on to hurt the others that Delphi also does work for.

The problem. Delphi is in Chapter 11.

Part of the solution: A new contract with the UAW.

A major part was the workers taking concessions and their maximum wage is now $18.50 instead of $27.00 an hour (assuming that the contract passes -- and there is a bribe for senior employees -- totaling a little over $100,000 per employee over 3 years if the contract passes.) Admittedly it is a huge cut (practically a third of their hourly wage) but

1) it beats the heck out of losing everything. As I said about when I first started blogging, It's a case of either lose a lot or lose everything. That is never a pretty option but those were the only two options.

2) $18.50, while it is not enough for affluence, is not all that horrible of a wage especially when you include the benefits package.

And now for the management. The workers will do their part; now you do yours. Take a cut in your salary as well. It's good for the company and it's the right thing to do.


Blogger Gayle said...

I don't know, Shoprat. Asking management to take a cut is pretty much asking for a miracle, but I would love to see them agree to do that.

8:06 PM  
Blogger Steven said...

"It's a case of either lose a lot or lose everything" I would rather stay here in MI for $18 then move to Alabama for $14. As far as cutting my salary (management) because you've(union)gone from a unrealistic wage to something closer to reality, well I have had cuts, due to health care increases. My situation is somewhat different, as an engineer I expect to be compensated for positive results.

9:03 PM  
Blogger Crazy Politico said...

I think management should take cuts at Delphi to show good faith.
Though there is a problem with that theory, getting good management to work for less than at other comparable companies.

John Lehman pointed out in his book "Command of the Seas" that substandard management pay was the leading cause of problems running large military facilities. It's hard to get the best when you pay for the middling.

8:13 AM  
Blogger BB-Idaho said...

It is written in stone somewhere that 'Thou Shalt Not Lower Mgt Compensation'. On the other hand, Mgt can be reduced 1/3 by simply terminating them, which is frequently done in such cases.

6:27 PM  
Anonymous Tim said...

Management will get a raise for bringing the labor costs down. What a wonderful job they did!

7:10 AM  
Blogger Jay said...

Shoprat, you are right on.

It may not add up to economists, but I firmly believe when times are good, all employees (labor and mgmt) should share in the wealth. When times are bad, both should scale back.

And times are bad right now in Michigan. At least economically.

9:58 AM  
Blogger Lone Pony said...

I'm with CP - a cut in pay for management would be the way to go.

1:12 PM  
Blogger shoprat said...

All: If a business is prospering then I have no problems with management and executives making large salaries, but a company that is on the ropes, as Delphi is, needs to be lead by example.

10:25 PM  

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