brillo

http://news.yahoo.com/s/nm/20060331/...gm_delphi_dc_3


Today will mark the beginning of the last days of the American auto industry as we know it as Delphi asked for a federal judge to void all its union and pricing contracts with GM and the UAW.

While the final voiding won't happen for about a month, GM is already well down the road to bankruptcy. A strike a Delphi would nearly shut GM operations down, causing them to burn nearly $1,000,000,000 a week. So much of the auto business has gone to just in time inventory, there is no way to stock up on critical parts to help with the potential strikes. The banks will never let GM burn through that cash, and will force GM into chapter 11 whether they want it or not.

What is staggering to me is the fact that GM stock is trading at less than cash value. In other words, GM has more cash on hand that equity from is stock. This is truly sad (and scary).

A Delphi strike could also hurt Ford and Toyota, who use their parts, and who's to say that the rest of the UAW won't go on strike if things get really ugly. I wish they would just get this over with because the longer its dragged out, the worse it is for everyone.

I would like to thank 8 decades of incompetent management and 4 decades of selfish unions for orchestrating the greatest financial meltdown/f*ck-up in U.S. history.

Red Devil

It wasn't mentioned in the article, but perhaps Federal courts will tell Delphi workers to go back to work and not allow the strike. The Fed has stepped-in in other industries in extreme cases like this to get everyone working and back to the negotiating table at the same time.

brillo

its feasible, but delphi isn't a infrastructure/national security critical company. Its not like air traffic controllers or police.

But hey, you never know, the fireworks are going to be interesting.

Cam

iTrader: (1)

^^

True, but a strike/bankruptcy by GM will cause a ripple effect throughout the entire U.S. (and global economy for that matter), which means the Government cant allow it. I smell a HUGE Federal bailout coming (ah, more of my taxes wasted due to incompetance).

Red Devil

^^^
That's what I was thinking, the ripple effect.

Coming from the rail industry, we generally do not have lengthy strikes. The gov't steps-in and always puts everyone back to work.

Renesis_8

Even if the govt steps in, it is only temporary tho, they cant escape their fate, they'll keep losing money. I am not sure what will happen tho, dont have enough knowledge in business and this stuff...
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rx8wannahave

Stupid is as stupid does

buzzardsluck

too bad they couldn't of told the unions to go f themselves earlier.

bascho

The press and outside analysts do not KNOW what is going to happen with GM. For all we know GM has sent all their blueprints and 3D CAD data to companies in China which are currently building plants to supply GM when Delphi USA goes bankrupt. Delphi itself is terminating unprofitable part contracts with GM......do you really think GM is not going to continue building cars? They are closing plants in the US and opening plants in Mexico. The only organizations that are truely going to die are labor unions. Delphi is a multinational company with plants all over the world......only the US plants are operating at a loss

Japan8

No they won't. The strike would likely only take place if one of two scenarios takes place where in either one Delphi will be significantly cutting hourly wages, cutting quite a number of employees worldwide and closing quite a number of plants. This will leave the company much leaner and meaner. If striking workers are forced back to work by the government... Delphi has a better chance of coming out of Chapter 11.

http://www.nytimes.com/2006/04/01/bu...KLSakl2Xoze5gw

bascho

Incompetance of labor union leaders right? The labor union is the problem....not the companies. How can Delphi possibly be competitive with other suppliers when their labor costs are double that of the rest of the industry? Any job that can be learned in a matter of hours should not pay $60-$80K a year. **** the unions and their leaders.....I hope they do strike.....it will give them something to do before they have to look for a new job. This isn't the 1960's America where the company has no other options but to deal with the unions. China, India, East Europe and Russia would happily make parts for GM, Ford & Chrysler......at whatever they are willing to pay. American unskilled laborers need to wake the **** up and realize what world they are living in. The Bush Administration has already picked a side (globalization)......so there is not going to be a bail-out. GM, Ford & Chrysler are not going anywhere just because the USA is uncompetitive in the unskilled labor market......hell, in 10 years, the US will be the #3 market for purchased automotive products anyway. If Americans want to save the middle class....then the union has to die soon. It will anyway.....but only after the middle class has all but disappeared in the US.

Japan8

bascho... you are so on it my man.

I can't feel sorry for the plant workers who want to possibly strike, nor (especially) the greedy unions. Toyota, Honda and Nissan are expanding plants and opening new plants like crazy. Don't like the changes? Suck it up or go get a non-union job at one of the Japanese auto plants.

WTF?! This line has me practically foaming at the mouth. These union pampered a$$holes should try a taste of the real world... the world were US companies treat their employees like coolies just to squeeze out an extra penny. Try slaving in IT... it ain't all glamourous. Jobs and wages... up and down. Constant study, certification and other BS. Seriously, give me a break...

bascho

That is exactly correct. The American manufacturing base is not going to disappear completely......it will just be owned by foreign interests. The Japanese, European and Korean automakers build very successful plants in the US every year. Their workers are fairly compensated and the union is no where to be seen. They avoid the unions by building plants in the south where the industrial base never really took hold....hence the unions are not strong in the south. Until the unions die, no foreign auto company is going anywhere near the northern US......even though that is where the best industrial workforce is located. Unions are going to kill the US OWNED industrial base in this country......but they will never hurt the US companies because of globalization. I predict that in 20 years, the US immigration issue will not exist. Illegal immigrant Mexicans in the US will be jumping back over the fence to get better jobs in Mexico.......if you haven't noticed, that is where the big three like to build North American plants these days.

Rhawb

A little off-topic, but after seeing what was going on at the Corvette plant, I really can't believe these companies get ANYTHING done with union labor. They get two breaks over an 8 hour day and it seems that they're really not obligated to get any work done anyway. I remember at maybe 9:15 or so - right after the place opened up - there was a guy letting cars just go by as he read the paper and plenty of others just standing around talking or eating.

It was incredible - at ANY other job, these folks would have been fired 500 times over, but they're all untouchable there thanks to the union. Amazing. Seeing all the cars getting put together was cool, but it REALLY shed some light on the problem with unions. Never realized just how little motivation there really is to get anything done. Hell, just in the time we were there, they went from 2 over their scheduled output to something like 6 under.

bascho

I have a great union story for you guys. When I was 19 my dad got me a part-time job (Monday's and Friday's) at his plant, Wayne Assy in Michigan. I was in college so I didn't have a lot of free-time to work....but I didn't want to make $7.00 like some of my friends. This was 1996, so at that time the plant built the Escort and the Tracer. I made $16.41 per hour which included $2.13 in union dues.....that's right they took $2.13 from my check for every hour worked. Anyways, that was good money for the time and my age. The Monday/Friday employee's started out each shift sitting a picnic table near the superintendants office. The superintendant would get calls from formans all over the plant saying this person didn't show up or that person didn't show up.....and could you send me someone. So, the superintendant would come over to the table and tell one of us to go over to this line and see this forman. Basically, I never had the same job twice in the 6 months I worked at the plant.

Well, one night I was working in pre-delivery driving the cars off the dyno and parking them in a final inspection line where inspectors checked all the door gaps, hood gaps, etc. Well, this particular job is a 2 man crew. I was a temp and the guy I was working with was full-time. He sits down to have a smoke while the cars are backing up at the dyno. What would any normal person do....I started running between picking-up and dropping off the cars. I was actually able to do this job on my own with just a little hustle. Guess who starts walking over to me as I get out of a car.....the dumbass full-timer. He tells me to slow down because this is a 2 man job.....and that if the forman see's that one guy can do this, then the full-timer that I was filling in for might not keep his job. He was dead serious and kinda a shitty with me. I could have told me dad about the issue since he is this guy's bosses, bosses boss (Quality mgr for the whole plant).....but I instead decided to laugh at how ridiculous the labor union is. I say **** 'em....they brought this upon themself.

Japan8

^^ Nice story. Yep... it's funny how these people don't even realize how they are shooting themselves in the foot. The unions that should be helping them aren't... just ensuring EVERYONE keeps their job and gets more pay and benefits doesn't necessarily benefit you nor the company (not the execs) in the long run. And these people start crying about how the "fat cat execs" are just trying to establish slave labor and how the "man" is trying to oppress the little guy. American companies on a whole are real bastards that only care about the bottom line, but in the case of the automotive industry... right now it's "no pain, no gain". Wanna see these companies hit the black with the quickness? Cut the number of managers, cut all executive salaries AND hit the factories/unions. Everyone is at fault.

Red Devil

Due to my current work position, I really won't go into any detail. But I do work every day with union labor. Many of the complaints that you guys list I more than sympathize with, and am extremely frustrated myself. At the same time, management also has a responsiblity to take a stand and set the example. Many times, this is not done. And many times, I have seen good union workers be chastised by their own kind for really helping management and wanting to get the job done efficiently. My opinion, both sides need a reality check. Unions do not have to go away, they have to accept reality.

Jabberwock

To comment on what you said bascho about illegal immigrants.

I think that it will be sooner than 20 years, since legislation is trying to pass that law on making illegal immigrants felons or being an illegal alien a felony. There are actually 10-15 million illegal immigrants in the United States and they make up at least 4% of the workforce here.

Illegal Immigrants, mainly mexicans, make up 20% of the Agricultural work force. Farmers will go down the drain again without the mexicans.

GM has been in Junk Bond Status for a long time now, September or October of last year I think is when they went into junk bond status.

Although GM will possibly go bankrupt, it is NOT going to be quick. They won't go bankrupt in the next few months. The reason is because they have so much cash saved up in the banks, I forgot the exact amount, but in the $100 Billion range, it will take a couple of years to deplete that much money. Less than 3 years though.

And the delphi workers were getting paid $60-80 per hour including benefits. Yearly they were making an average of over $100K with benefits, DAMN CRAZY

Japan8

^^ GM has more like 26 or 28 billion AFTER the upcoming sale of GMAC (pending approval). That is what will give them more cash than Ford ($25 billion), but with GM's own union issues and Delphi's... GM could end up paying out alot of that cash instead of having it for prodcut development.

Jabberwock

Hmm...I remember that in the Wall Street Journal stated that GM was accumulating a lot more than that in an article last year(In the 100B's), I could be wrong.

Heh...GMAC was having problems and the sale almost failed.

bascho

The last I heard GM has $20bn in cash. Now, from that $20bn, $10bn will go to operating costs for GM leaving $10bn. GM was just locked out of $5.6bn in available credit due to their credit rating. Now, GM is selling their interest in Izuzu and Suzuki, but that money is going to cover the buy-outs for GM's and Delphi's early retirement of close to 50,000 people. I would say that if GM sells their controlling interest in GMAC, then they might have $23bn to cover the costs of the stike. The UAW only has $700mn available in the strike fund. However, I read that a strike will cost GM $1bn a week......I'm sure the strike will not cost the UAW even close to that amount. I think union workers get $200 for a 40-hour week on the strike line or $40 per day.

Japan8

regarding the GMAC sale...

http://www.nytimes.com/2006/04/04/business/04auto.html

Regarding Delphi and the UAW payoff
http://www.nytimes.com/2006/04/04/business/04auto.html