Delphi Bankruptcy to cost GM 11 billion

[Ghost Dog]

Well,well,well. No greed, eh?
http://www.uaw.org/delphi/delphiupdate.cfm?duId=4

Delphi’s decision to sweeten the severance packages for its 21 top executives – and the more recent announcement that it planned to offer up to 10% of the equity in the reorganized company and nearly $90 million in cash bonuses to just under 500 key executives

90 million. Hmm you could employ 2,600 people at 17.00 an hour.

90 MILLION IN GREED Edited October 11, 2005 by Ghost Dog

[motownr]

As in my post in an earlier thread, I believe the solution must come from outside GM. This is a problem that effects much of US industry and is a structural problem that goes way beyond GM. There must be a national solution that removes the burden of supporting retired employees from companies whose customer and employee base no longer supports it. Companies change, entire industries change. There must be a structural change in the entire US pension system that avoids the neccessity of bankruptcy and the loss of benefits. It's time to establish a handful of funds that will cover the entire population, pooling the assets and liabilities of existing company, industry and union funds, if necessary backed up by a sales tax on every product sold in the US, both domestic and import, physical and intangible. Only in this way will you avoid the problems associated with economic change you see facing Delphi and GM, and remove the need for the current underfunded guarantee corporation. It shouldn't require every company in the US to go bankrupt with the subsequent loss of benefits to accomplish this.

[post="26956"]<{POST_SNAPBACK}>[/post]

I respectfully disagree.

We're witnessing the evolution of responsibility for retirement from employers via defined benefits to employees via defined contributions.

If you (meaning anyone) can't be responsible enough to save for your own retirement, then you'd better plan on working until your last day on earth. It shouldn't be up to the rest of us to finance your stupidity via some incredibly costly federal program.

The federal Pension Benefit Guarantee Program is a safety net to bridge the gap in the workplace as corporations migrate from defined benefit programs to 410Ks, etc...it's not designed to provide a full retirement equal to what the private market may offer.

On a related note, Miller has made it clear that the UAW has a choice: work for a lower wage and get your full pension, or work for whatever the market will bear and get what the GPBC will give you. It's a fair option, given the circumstances.

Think the UAW rank and file will go along with it? Probably not. But they'd better think twice, because they are out of options.

[Ghost Dog]

I respectfully disagree. 

We're witnessing the evolution of responsibility for retirement from employers via defined benefits to employees via defined contributions.

If you (meaning anyone) can't be responsible enough to save for your own retirement, then you'd better plan on working until your last day on earth.  It shouldn't be up to the rest of us to finance your stupidity via some incredibly costly federal program.

The federal Pension Benefit Guarantee Program is a safety net to bridge the gap in the workplace as corporations migrate from defined benefit programs to 410Ks, etc...it's not designed to provide a full retirement equal to what the private market may offer. 

On a related note, Miller has made it clear that the UAW has a choice:  work for a lower wage and get your full pension, or work for whatever the market will bear and get what the GPBC will give you.  It's a fair option, given the circumstances. 

Think the UAW rank and file will go along with it?  Probably not.  But they'd better think twice, because they are out of options.

[post="27285"]<{POST_SNAPBACK}>[/post]

They can, and should strike. What Delphi is dictating is their wet dream.Not even close to reasonable. Once Delphi moves to Void the CBA. Shut them Down.

[motownr]

They can, and should strike. What Delphi is dictating is their wet dream.Not even close to reasonable. Once Delphi moves to Void the CBA. Shut them Down.

[post="27287"]<{POST_SNAPBACK}>[/post]

They'd better have some warm clothes, then, because they're going to be on the outside looking in as tens of thousands of applicants line up to take their jobs.

The average blue-collar worker listens to the gripes of the typical UAW guy and thinks he's nuts. Don't think so? Just wait until DPH starts to advertise openings at competitive market rates....they'll be overwhelmed with people willing to 'suffer' at such horrible wages...just like Honda, Toyota, Nissan, and Hyundai were overwhelmed with people willing to be 'victimized' for similar wages.

My grandfather was a union organizer. I respect the contributions organized labor has made. But that doesn't make me one bit sypathetic to where the leadership has taken their members.

Get smart, or start looking for a new job. It's going to be as simple as that for the rank and file.

[Guest Josh]

"Honda, Toyota, Nissan, and Hyundai were overwhelmed with people willing to be 'victimized' for similar wages." Honda, Toyota, Nissan & Hyundai pay UAW-like wages. There's not argument against that. IF that's "victimized" then what is this called? Rape?

[razoredge]

We're witnessing the evolution of responsibility for retirement from employers via defined benefits to employees via defined contributions.

If you (meaning anyone) can't be responsible enough to save for your own retirement, then you'd better plan on working until your last day on earth.  It shouldn't be up to the rest of us to finance your stupidity via some incredibly costly federal program.

[post="27285"]<{POST_SNAPBACK}>[/post]

You dont have any idea what you are talking about. You are just insulting people that spent 30-40 years of their lives working and want to throw them in the streets, get a life !. A set amount per hour was put into a pension fund every hour they worked of their life. It was part of their wages, just get it through your dense head(s). Its not some friggin welfare system or the companys pulling money out of their pockets today. It was money being socked away for years......exactly what you keep insisting they did not do.

Theres no friggin evolution to it. Large companys always had large pension plans, they how they were set up thats how it worked. These little startup companys the last 20 years applied a different system of 401K's. Your just looking at two different retirement systems, not some evolution, dont be thinking your so special. Their two entirely different retirement systems. You think because you have some "new" idea, all contributions to older retirement plans should just vanish because you have some "new" way.

You dont want evolution you want a chop off, cut from the herd. You are pathatic. Screw em right ? Even if that is how their retirement plans were set up, screw em...... why because you have some other kind of plan ? That was their plan.

Its like you go to get out your 401K at retirement and find out theres less in there than you put let alone any interest or earnings. Actually could and does happen, but Id be an idiot to think anyone deserves that, I wish for the best for everyone but Im beginning to want to throw some people in the streets myself.

The government has this federal pension benefit guarantee program because for quite a few years, business's that left this country, sold off, or went "bankrupt" began leaving life time retirees without their pension plan system in place. Our government recognizes this for how wrong it is and steps in and pay pennies on the dollar for what those plans were worth before the big sellouts. If these sellouts never took place we would not be having this sick discussion today. Furthermore, all you great "economists" do you really think, anyone would think where all this stands today was not charted out and planned for 30 years ago ? Really ? Must be only these young "new" economists have the ability to foresee the future ?

Geeze, give it a break, all the twisting, finger pointing, throw them in the streets mentality and you wanna bad mouth the crazy problems with the Unions.

Theres a disease in the entire root system.

Throw the elderly in the streets ! Bravo tuff guys :unsure:

[Ghost Dog]

[thegriffon]

So basically tax all the companies who sell products here, to cover all the employees that work here, making it a level playing field?

[post="27232"]<{POST_SNAPBACK}>[/post]

Not quite. Existing pension funds would be combined into a small number of PBGC-insured, privately managed funds at a fixed level defined by legislation similar to that currently required. Companies would pay premiums to cover current employees, much as you do with life insurance, but the burden for retirees and former employees would be spread across the whole fund. In this way companies with a shrinking workforce don't pay an unduly large proprotion compared to companies with a growing workforce. It has also been suggested that a sales tax be instituted to subsidize contributions or insure benefits, but I see national pension funds as a pre-requisite.

A broad sales tax to pay retiremet benefits (either pension fund or 401K contributions) is a seperate issue, but is attractive for a number of reasons. Like national pension funds it spreads the burden over the entire economy, and is not dependent on the health of any one company or industry. In addition it levels the playing field between domestic companies paying money into 401Ks* and pension funds, and imports which do not, and encourages job creation (if you're paying for someone's pension anyway, then actually employing them becomes more attractive).

*the issue of whether it is paid by the company or the employee is simply a matter of accounting and taxation semantics - in financial terms it is the same contribution to an employer's labor costs.

[Teh Ricer Civic!]

So does this mean that Delphi will be part of the GM fold once more?

[Member55]

So does this mean that Delphi will be part of the GM fold once more?

[post="27433"]<{POST_SNAPBACK}>[/post]

GM doesn't want them back. Why would they want 20000 UAW members back?

[Guest Josh]

There is certainly a chance General Motors may wind up the "owner" of Delphi in terms of assets and what not, regardless of the pension/worker outcome. I wouldnt want to have any stake in the company at all. It's dead. It might be a worldwide company, however its assets will be spun off to pay for its enormous debts. Bye Bye Delphi!

[FUTURE_OF_GM]

In the mean time perhaps GM's fund managers should buy Toyota and siphon all that cash flow into supporting retirees.

You know, I was thinking the other day... Why doesn't GM try to do a hostile takeover of Toyota?

I mean, I know I'm over simplifying things A LOT. Hell, it might not even be a possible scenario, but seriously... If you can't beat them, then buy them. It would detroy the cash hoard that the company has built up but if they actually get the "savior of automotive consumers" then think of the income they'd secure.

To think someone will go from Middle class to poverty without a fight is just silly. they can be poor working for somebody else.

That is a VERY key phrase because it centers around the CAUSE of this entire issue. Because of outsourcing and this 'wonderful' global economy we live in the American middle class is being destroyed. Why? Because we are the only 3 tier society in the world and in order to compete with other countries we have to accept lower pay rates to generate lower prices. Thus, the great Paradox of modern America is reached; either accept pay cuts and become a part of what we consider poor or poverty or watch your job leave and go to China.

It sucks bad, but it's true... There will be a point in this country where we no longer have a middle class through the simple diffusion of trying to compete with low income countries/employment. And what's sad is that we're our own worst enemy; we're destroying ourselves by putting these cheaper made, foreign goods above ours on our shopping lists, yet no one seems to be able to wake up and see that and if they do raise an eye lid, it is immediately shut by the media and its agendas. The days of The American Dream are over.

[bowtie_dude]

"Honda, Toyota, Nissan, and Hyundai were overwhelmed with people willing to be 'victimized' for similar wages."

Honda, Toyota, Nissan & Hyundai pay UAW-like wages. There's not argument against that. IF that's "victimized" then what is this called? Rape?

[post="27309"]<{POST_SNAPBACK}>[/post]

Toyota pays those wages because A) They can afford to since their overseas operations or cost fractions less than their US and B) Because if they didn't, their workers would UNIONIZE, making it worse for them in the US.

And thats the ONLY reasons why.

[Guest Josh]

Because if they didn't, their workers would UNIONIZE, making it worse for them in the US. 

And thats the ONLY reasons why.

[post="27474"]<{POST_SNAPBACK}>[/post]

So, basically you wish to break the Union. That's all you wish to do. Break the Union to give the companies an upper hand.

I can't understand it. I really can't. I sit here shaking my head.........I relly can't believe it.

[Teh Ricer Civic!]

GM doesn't want them back. Why would they want 20000 UAW members back?

[post="27463"]<{POST_SNAPBACK}>[/post]

The prospect of a reformed, lean, and profitable company. :)

[Member55]

So, basically you wish to break the Union. That's all you wish to do. Break the Union to give the companies an upper hand.

[post="27478"]<{POST_SNAPBACK}>[/post]

Brake the union to give the companies a chance to survive.

[motownr]

There is certainly a chance General Motors may wind up the "owner" of Delphi in terms of assets and what not, regardless of the pension/worker outcome.

I wouldnt want to have any stake in the company at all. It's dead. It might be a worldwide company, however its assets will be spun off to pay for its enormous debts.

Bye Bye Delphi!

[post="27466"]<{POST_SNAPBACK}>[/post]

Why is that, Josh?

Under a reasonable restructuring, equity in one of the top suppliers in the industry might be a terrific stock.

Wilbur Ross is not waiting in the wings because he thinks this is a lousy opportunity.....

[motownr]

You dont have any idea what you are talking about. You are just insulting people that spent 30-40 years of their lives working and want to throw them in the streets, get a life !. A set amount per hour was put into a pension fund every hour they worked of their life. It was part of their wages, just get it through your dense head(s). Its not some friggin welfare system or the companys pulling money out of their pockets today. It was money being socked away for years......exactly what you keep insisting they did not do.

Theres no friggin evolution to it. Large companys always had large pension plans, they how they were set up thats how it worked. These little startup companys the last 20 years applied a different system of 401K's. Your just looking at two different retirement systems, not some evolution, dont be thinking your so special. Their two entirely different retirement systems. You think because you have some "new" idea, all contributions to older retirement plans should just vanish because you have some "new" way.

You dont want evolution you want a chop off, cut from the herd. You are pathatic. Screw em right ? Even if that is how their retirement plans were set up, screw em...... why because you have some other kind of plan ? That was their plan.

Its like you go to get out your 401K at retirement and find out theres less in there than you put let alone any interest or earnings. Actually could and does happen, but Id be an idiot to think anyone deserves that, I wish for the best for everyone but Im beginning to want to throw some people in the streets myself.

The government has this federal pension benefit guarantee program because for quite a few years, business's that left this country, sold off, or went "bankrupt" began leaving life time retirees without their pension plan system in place. Our government recognizes this for how wrong it is and steps in and pay pennies on the dollar for what those plans were worth before the big sellouts. If these sellouts never took place we would not be having this sick discussion today. Furthermore, all you great "economists" do you really think, anyone would think where all this stands today was not charted out and planned for 30 years ago ? Really ? Must be only these young "new" economists have the ability to foresee the future ?

Geeze, give it a break, all the twisting, finger pointing, throw them in the streets mentality and you wanna bad mouth the crazy problems with the Unions.

Theres a disease in the entire root system.

Throw the elderly in the streets ! Bravo tuff guys  :unsure:

[post="27371"]<{POST_SNAPBACK}>[/post]

I think your ad hominem attack speaks volumes for your side of this discussion.

May I ask your background in economics?

Perhaps you may have overlooked my point that I come from a pro-union background. However, that has not blinded me to the facts of the situation, which you conveniently ignore.

[bowtie_dude]

So, basically you wish to break the Union. That's all you wish to do. Break the Union to give the companies an upper hand.

I can't understand it. I really can't. I sit here shaking my head.........I relly can't believe it.

[post="27478"]<{POST_SNAPBACK}>[/post]

Now you realize that just because I want to see Unions of ALL KINDS gone doesn't mean I want the workers to lose their jobs, right? I just don't see the need for mob tactics in the 21st century.

[FUTURE_OF_GM]

Brake the union to give the companies a chance to survive.

[post="27485"]<{POST_SNAPBACK}>[/post]

Precisely

[CaddyXLR-V]

Why is that, Josh?

Under a reasonable restructuring, equity in one of the top suppliers in the industry might be a terrific stock. 

Wilbur Ross is not waiting in the wings because he thinks this is a lousy opportunity.....

[post="27489"]<{POST_SNAPBACK}>[/post]

I'm with you on that. I believe Delphi will pull through this, and be a better company than ever. I'm going to buy some stock myself. And why would anyone want a company with 28 billion in revenue to be closed down? They contribute the Michigan economy alot, why would anyone want to close down such a huge company in their own state? They will feel the after effects for a long time if that happens.

[Ghost Dog]

I think Delphi should be liquidated. Proceeds from the asset sales to cover the employee pensions. Then let buyers of any plants negoitiate new deals with the U.A.W. To hell with Miller and Delphi ! Retired employees would have thier pensions full and intact. Yet to retire employees would have thier accrued pension benefits used to seed 401ks. Edited October 12, 2005 by Ghost Dog

[97regalGS]

I agree and in one of my rants from months ago I said, "GM, Ford and DCC are not run like businesses but welfare systems for their retired employees." 

The institutional problem is the US government is leveraged as bad as the US Big 3.  Even the Medicare prescription plan that takes affect shortly which was designed to eleviate some of the health care burden on these companies is not funded.  With ongoing problems in Iraq that do not appear to be moving in the right direction and the US will have to continue to fund, the aftermath of Rita and Katrina, inflation potential because of fuel prices that, all contributing to a possible slow down in the economy, there is no easy solution to fix significant structural problems in the US economy.

Short term solution will have to be for the government to raise the employee tax on corporations which would be the most fair to pay for SS, medicare and Pension Benefit Guaranty Corp. obligations.

Does anyone think that will happen with the current administrations adversion to tax hikes?

[post="26999"]<{POST_SNAPBACK}>[/post]

hmmm, who voted that guy into office AGAIN, anyway?