A strike at Delphi could cripple GM -- analysts

[Variance]

A strike at Delphi could cripple GM -- analysts

Wed Feb 15, 2006 4:28 PM ET

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By Jui Chakravorty

DETROIT (Reuters) - As the deadline for Delphi Corp. to ask a court to void its union contracts edges closer, analysts worry a strike at the auto parts maker -- General Motors Corp.'s largest supplier -- would deepen the financial crisis at the automaker.

Bankrupt Delphi Corp. has threatened to ask the court to void its contracts with the United Auto Workers union if it cannot reach an agreement by Friday to lower labor costs.

This could result in a strike, which could shut down plants and force GM to burn through billions of dollars, according to analysts.

"A work stoppage that shuts down GM's North American operations would result in cash burn of around $5 billion per month," JP Morgan analyst Himanshu Patel wrote in a research note.

"The working capital outflow could begin to diminish after the first month, but GM's desire/ability to sustain a strike beyond a month seems low."

In November, UBS analyst Rob Hinchcliffe said a strike at one or two strategic plants would force GM to use up $19 billion in cash and liquid assets in about 10 weeks. Deutsche Bank analyst Rod Lache also said that month that GM may burn through $13 billion in cash if a strike were to last a quarter.

Some analysts said GM is considering offering buyouts to Delphi workers.

GM, which spun off Delphi in 1999, has said it could be on the hook for as much as $12 billion in contract obligations to its former employees as Delphi demands deep pay and benefit cuts from the union.

The world's largest automaker lost $8.6 billion in 2005 due to high labor and commodities costs, loss of U.S. market share to foreign rivals and sluggish sales of sport utility vehicles.

As part of a broader restructuring effort, GM has said it plans to slash 30,000 jobs and close a dozen facilities through 2008.

If talks fail and a bankruptcy court tosses out Delphi's labor contracts, union workers could strike the auto parts maker -- a move that would halt GM production quickly, hampering new vehicle launches critical to GM's success.

GM is currently ramping up production of the critical T-900 series -- redesigned SUVs that are more fuel efficient.

"We believe a protracted strike which affected this launch should be viewed as a significant "opportunity cost" for the company," Patel said.

A 1998 strike at Delphi essentially halted GM's North American operations for nearly two months.

GM spokesman Jerry Dubrowski said the three parties are in talks.

"We continue to be in discussions with Delphi and the UAW, to reach an agreement that would allow Delphi to emerge as an important supplier to GM, but also that would make sense for GM and its stockholders," he said.

A UAW spokesman said the talks were "ongoing," but refused to disclose any details.

"(An agreement) is very complicated, but doable," David Cole, chairman of the Center for Automotive Research, said in reference to the possibility of Delphi, GM and the unions eventually reaching an agreement on cost cuts.

It is in the interest of the judge and the parties to work this out and they are making some progress, he added.

To compound matters, GM is in talks with potential partners to sell its finance arm, General Motors Acceptance Corp., in an effort to restore an investment-grade rating to GMAC.

"One of the likely sticking points in the pending sale of GMAC may well be resolution on Delphi, further emphasizing GM's interest in avoiding a labor dispute," Patel said.

The industrial arm of the Communications Workers of America, which represents about 8,500 Delphi workers, is also involved the discussions.

IUE-CWA spokeswoman Lauren Asplen said there had been little interaction with Delphi so far, but the union expects to continue talking even if Delphi files the motions on Friday.

The union would not be free to strike until the contracts were tossed out by the bankruptcy court, something that would be many weeks away, but a filing would add "unnecessary pressure," Asplen added.

Link: http://today.reuters.com/business/newsarti...M-DELPHI-DC.XML

[ellives]

It's time for the nuclear option GM. Break the union now!

A strike at Delphi could cripple GM -- analysts

Wed Feb 15, 2006 4:28 PM ET

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By Jui Chakravorty

DETROIT (Reuters) - As the deadline for Delphi Corp. to ask a court to void its union contracts edges closer, analysts worry a strike at the auto parts maker -- General Motors Corp.'s largest supplier -- would deepen the financial crisis at the automaker.

Bankrupt Delphi Corp. has threatened to ask the court to void its contracts with the United Auto Workers union if it cannot reach an agreement by Friday to lower labor costs.

This could result in a strike, which could shut down plants and force GM to burn through billions of dollars, according to analysts.

"A work stoppage that shuts down GM's North American operations would result in cash burn of around $5 billion per month," JP Morgan analyst Himanshu Patel wrote in a research note.

"The working capital outflow could begin to diminish after the first month, but GM's desire/ability to sustain a strike beyond a month seems low."

In November, UBS analyst Rob Hinchcliffe said a strike at one or two strategic plants would force GM to use up $19 billion in cash and liquid assets in about 10 weeks. Deutsche Bank analyst Rod Lache also said that month that GM may burn through $13 billion in cash if a strike were to last a quarter.

Some analysts said GM is considering offering buyouts to Delphi workers.

GM, which spun off Delphi in 1999, has said it could be on the hook for as much as $12 billion in contract obligations to its former employees as Delphi demands deep pay and benefit cuts from the union.

The world's largest automaker lost $8.6 billion in 2005 due to high labor and commodities costs, loss of U.S. market share to foreign rivals and sluggish sales of sport utility vehicles.

As part of a broader restructuring effort, GM has said it plans to slash 30,000 jobs and close a dozen facilities through 2008.

If talks fail and a bankruptcy court tosses out Delphi's labor contracts, union workers could strike the auto parts maker -- a move that would halt GM production quickly, hampering new vehicle launches critical to GM's success.

GM is currently ramping up production of the critical T-900 series -- redesigned SUVs that are more fuel efficient.

"We believe a protracted strike which affected this launch should be viewed as a significant "opportunity cost" for the company," Patel said.

A 1998 strike at Delphi essentially halted GM's North American operations for nearly two months.

GM spokesman Jerry Dubrowski said the three parties are in talks.

"We continue to be in discussions with Delphi and the UAW, to reach an agreement that would allow Delphi to emerge as an important supplier to GM, but also that would make sense for GM and its stockholders," he said.

A UAW spokesman said the talks were "ongoing," but refused to disclose any details.

"(An agreement) is very complicated, but doable," David Cole, chairman of the Center for Automotive Research, said in reference to the possibility of Delphi, GM and the unions eventually reaching an agreement on cost cuts.

It is in the interest of the judge and the parties to work this out and they are making some progress, he added.

To compound matters, GM is in talks with potential partners to sell its finance arm, General Motors Acceptance Corp., in an effort to restore an investment-grade rating to GMAC.

"One of the likely sticking points in the pending sale of GMAC may well be resolution on Delphi, further emphasizing GM's interest in avoiding a labor dispute," Patel said.

The industrial arm of the Communications Workers of America, which represents about 8,500 Delphi workers, is also involved the discussions.

IUE-CWA spokeswoman Lauren Asplen said there had been little interaction with Delphi so far, but the union expects to continue talking even if Delphi files the motions on Friday.

The union would not be free to strike until the contracts were tossed out by the bankruptcy court, something that would be many weeks away, but a filing would add "unnecessary pressure," Asplen added.

Link: http://today.reuters.com/business/newsarti...M-DELPHI-DC.XML

[Guest Josh]

$h! is going to hit the fan. There's absolutely no way around it.

It's going to be ugly, very, very ugly.

[Newbiewar]

blow production up while they are still working...

then void the contracts and hire new employees

if the bankrupsy doesnt void the contracts then what was the point?

Edited February 17, 2006 by Newbiewar

[Ghost Dog]

I so Dislike Miller that I might be happier if it goes Nuclear and Delphi is destroyed and Dissolved.

The anger in me would rather have the Entire U.S. auto industry fail then Miller get his sixteen million.

[4gm]

Yeah, those execs put in charge of turning around Delphi shouldn't be getting, or potential receive, as much as they've been promised. It's completely obscene. But union workers have had it pretty good; health care almost completely paid for, a pension & and pretty generous hourly rate.

Pay and benefits for both sides needs to be taken down.

[-Camaro-]

Can't they find a NEW supplier?

[Newbiewar]

Can't they find a NEW supplier?

it would probably take minimum 6 months probably

[-Camaro-]

it would probably take minimum 6 months probably

Darn. They should have been looking for a new supplier when Delphi was going down the crapper...

[Newbiewar]

Darn. They should have been looking for a new supplier when Delphi was going down the crapper...

they are always looking for cheaper and better suppliers... but they have contracts...

[ellives]

GM should have weaned themselves from Delphi as a sole source supplier long ago or at least reduced their dependence to the point where having them strike or fail couldn't bring down the whole company. Now it appears that a strike would burn what cash they have in 3 months or less. As I said in a prior post it's time to throw down the gauntlet. The golden goose is dying and if the union is stupid enough to finish it off by striking so be it.

they are always looking for cheaper and better suppliers... but they have contracts...

[Newbiewar]

GM should have weaned themselves from Delphi as a sole source supplier long ago or at least reduced their dependence to the point where having them strike or fail couldn't bring down the whole company. Now it appears that a strike would burn what cash they have in 3 months or less. As I said in a prior post it's time to throw down the gauntlet. The golden goose is dying and if the union is stupid enough to finish it off by striking so be it.

GM is weining... delphi is the most expensive in the industry...

[CaddyXLR-V]

$h! is going to hit the fan. There's absolutely no way around it.

It's going to be ugly, very, very ugly.

Those payouts to the top execs are pretty ridiculous, they could at least wait until they turn the company around.

Losing $5B a month will cripple GM. The only other option Delphi has is to utilize their overseas operations, but scrambling to meet demand in overseas plants I imagine would have a negative impact on quality, which is another thing GM cant afford right now. Those workers have to know that if they strike, they most likely wont have a job once its all over. I know they want to fight for what they feel they earned, but when theres nothing left there wont be anything to fight for.

And if the entire US auto industry fails, who would be paying their debt, and pensions? If the auto industry goes down, there would be no union left.

What a mess.

[ellives]

It certainly is a mess. Somebody needs to establish an internal strategy (not one they'd make public) that prunes the company to the point where they're making money and can get themselves some breathing room so they can think clearly. Right not there's so much stress everywhere I suspect they're making irrational and emotional decisions. This little nip and tuck stuff they're doing right now is the kind of thing that will kill the company in a slow, painful death spiral.

Those payouts to the top execs are pretty ridiculous, they could at least wait until they turn the company around.

Losing $5B a month will cripple GM. The only other option Delphi has is to utilize their overseas operations, but scrambling to meet demand in overseas plants I imagine would have a negative impact on quality, which is another thing GM cant afford right now. Those workers have to know that if they strike, they most likely wont have a job once its all over. I know they want to fight for what they feel they earned, but when theres nothing left there wont be anything to fight for.

And if the entire US auto industry fails, who would be paying their debt, and pensions? If the auto industry goes down, there would be no union left.

What a mess.

[Guest Josh]

I so Dislike Miller that I might be happier if it goes Nuclear and Delphi is destroyed and Dissolved.

The anger in me would rather have the Entire U.S. auto industry fail then Miller get his sixteen million.

<{POST_SNAPBACK}>

Miller is nothing. He tried to play hard ball before the NAIAS and the Union balked much like they are now. There are two reasons behind this.

1) The Union has GM's backing. General Motors will NOT allow a bankrupt supplier to cripple them. It's just not going to happen.

2) The Union has GM's backing. General Motors will NOT allow a bankrupt supplier to cripple them. It's just not going to happen.

Shall I repeat?

As far as those that have said GM should try to find another supplier to replace Delphi? They've been looking, they've found most. You just won't hear about it for another 6 months or so.

[SoCalCTS]

I hope Delphi just dies totally. I'm sick of their cheap tacky products junking up GM cars.

Good for the UAW for standing up to corporate greed. You know that whatever happens at Delphi the top executives will be laughing all the way to the bank and the workers, consumers and GM will be screwed.

And listen up GM, don't get any ideas about union busting because the union is the main reason that I (and many others) have been loyal customers. No one does a better job than an American unionized employee.

[Guest Josh]

Speaking of suppliers......Lear...ohhhhh BOY!!

[razoredge]

so what exactly does Delphi supply ?

[Newbiewar]

so what exactly does Delphi supply ?

a lot... if u look under the hood,

just to name a few things...

the electronic throttle control is delphi... all the way to the key fobs...

[ellives]

Just the kind of attitude that killed the unions... like I said "we vs. they."

Sorry but you're not based in reality when you say "no one does a better job..." In fact nobody HAS to do it better although there are those would argue there ARE some that ARE doing it better. All that's required is to do it just as well and for a lower price. This puts any union shop at a disadvantage and will eventually put GM out of business unless all its competitors are unionized. Otherwise the game is over.

"Cheap tacky products?" This comment is totally ridiculous. Suppliers build what they are told to build to the specs they're told to build to. If you want to complain about "cheap tacky products" you'd better complain to GM. They are to blame for producing poor specs and/or for accepting inferior product. Either way they own it.

If you want to blame someone for "corporate greed" blame the stockholders (which somehow I'm sure as a unionized employee you own stock) for not standing up for yourselves and ALLOWING GM to pay all kinds of ridiculous money to these morons while GM continues to lose money and market share. Who pays big money for poor performance? Well truth be told lots of companies do in the US.

You're probably a Democrat.

I hope Delphi just dies totally. I'm sick of their cheap tacky products junking up GM cars.

Good for the UAW for standing up to corporate greed. You know that whatever happens at Delphi the top executives will be laughing all the way to the bank and the workers, consumers and GM will be screwed.

And listen up GM, don't get any ideas about union busting because the union is the main reason that I (and many others) have been loyal customers. No one does a better job than an American unionized employee.

[razoredge]

Just the kind of attitude that killed the unions... like I said "we vs. they."

Sorry but you're not based in reality when you say "no one does a better job..." In fact nobody HAS to do it better although there are those would argue there ARE some that ARE doing it better. All that's required is to do it just as well and for a lower price. This puts any union shop at a disadvantage and will eventually put GM out of business unless all its competitors are unionized. Otherwise the game is over.

"Cheap tacky products?" This comment is totally ridiculous. Suppliers build what they are told to build to the specs they're told to build to. If you want to complain about "cheap tacky products" you'd better complain to GM. They are to blame for producing poor specs and/or for accepting inferior product. Either way they own it.

If you want to blame someone for "corporate greed" blame the stockholders (which somehow I'm sure as a unionized employee you own stock) for not standing up for yourselves and ALLOWING GM to pay all kinds of ridiculous money to these morons while GM continues to lose money and market share. Who pays big money for poor performance? Well truth be told lots of companies do in the US.

You're probably a Democrat.

Moron ? did somebody say Moron ?

[razoredge]

a lot... if u look under the hood,

just to name a few things...

the electronic throttle control is delphi... all the way to the key fobs...

electronic parts ?

[CaddyXLR-V]

electronic parts ?

and heating and a/c systems

[ellives]

That wasn't very nice. How about some intellectual banter instead of name calling? Oh that's right you must be a Democrat too. (Just kidding - sheesh.)

Moron ? did somebody say Moron ?

[-Camaro-]

I don't quite understand everything, but if Dephi did strike, then why can't GM just cease all operations untill they get a new supplier? Why would they have to pay money if nothing was happening?

[razoredge]

That wasn't very nice. How about some intellectual banter instead of name calling? Oh that's right you must be a Democrat too. (Just kidding - sheesh.)

Sorry I dont know what a Republican or a Democrat is.......Im a Patriot Radical........if somethings not working change it.....radically fast........if thats not working........get radical again.

Na, there are alot of overpaid morons in this world, I dont think the Union members are the only ones. I also dont apply to the who ever works cheaper wins attitude, that is a reverse gear, I like to see socioty move forward as a whole........not just the puppet masters at the top. So funny though how often we appear to be brainless puppets, dancing to the beat pounded by our "Lords"

Im hoping the Union employees will see clearly the reality of this situation and step down a few pegs, its the only way with our governments need to succumb to foreign interests......after all, could we expect them to look after the interests of American workers.

tic toc tic toc tic toc tic toc tic toc tic toc tic toc tic toc tic toc tic toc tic toc

[ellives]

One word: "overhead"

Even if they do nothing - nobody comes to work - no trucks roll off the line - GM has HUGE, absolutely HUGE bills to pay. They can't afford to NOT push vehicles off the line and sell them. This is another testament to their past management sins - getting themselves so leveraged in debt and other obligations that they have no room to move - backed into a corner.

I don't quite understand everything, but if Dephi did strike, then why can't GM just cease all operations untill they get a new supplier? Why would they have to pay money if nothing was happening?

[ellives]

Look after the interests of the American worker? LMAO - This is a very complex issue. In fact the US has raised the standard of living all over the world but opening our markets. The problem is while we're bringing their standard of living up, we're naturally dragging ours down. It's doubtful anything drastic will happen like we'll switch places 'standard of living-wise' with third world countries but it's clearly the next few generations will not have it as well as the last few.

Can't you just hear that "giant sucking sound?" (courtesy of Ross Perot.)

Sorry I dont know what a Republican or a Democrat is.......Im a Patriot Radical........if somethings not working change it.....radically fast........if thats not working........get radical again.

Na, there are alot of overpaid morons in this world, I dont think the Union members are the only ones. I also dont apply to the who ever works cheaper wins attitude, that is a reverse gear, I like to see socioty move forward as a whole........not just the puppet masters at the top. So funny though how often we appear to be brainless puppets, dancing to the beat pounded by our "Lords"

Im hoping the Union employees will see clearly the reality of this situation and step down a few pegs, its the only way with our governments need to succumb to foreign interests......after all, could we expect them to look after the interests of American workers. 

tic toc tic toc tic toc tic toc tic toc tic toc tic toc tic toc tic toc tic toc tic toc

[-Camaro-]

One word: "overhead"

Even if they do nothing - nobody comes to work - no trucks roll off the line - GM has HUGE, absolutely HUGE bills to pay. They can't afford to NOT push vehicles off the line and sell them. This is another testament to their past management sins - getting themselves so leveraged in debt and other obligations that they have no room to move - backed into a corner.

But wouldn't that save them money? Aren't they losing money on every vehicle the sale?

[ellives]

They are but that's a "bean counter's" way of looking at it.

Here's another way of looking at it: When you buy a house, say your mortgage is $1000/month and say your income is $4000 / month. Figure all your expenses add up to $3500/month (car payment, restaurants, food, insurance, etc.) so you're able to put away $500 / month in savings (consider this your 'profit'.) After a year you've saved $6000. All is good right?

OK so now let's say you lose your job. Now your income (from unemployment insurance) is $1500 /month. Your expenses aren't going to change much - let's say you can cut back to $3000 / month. Just to get by you're going to need to supplement your income with $1500 from savings. After 4 months you're totally broke.

This is kinda like GM if they're not shipping cars. They still have the $3000/month expenses and NO unemployment insurance so they better have a pile of cash to cover the expenses (which can't be cut back on like the mortgages on all their buildings and equipment and tooling and blah blah -- lots of costs.)

But wouldn't that save them money? Aren't they losing money on every vehicle the sale?

Edited February 18, 2006 by ellives

[daves87rs]

&#036;h&#33; is going to hit the fan. There's absolutely no way around it.

It's going to be ugly, very, very ugly.

At least for a while, anyways...

[daves87rs]

GM should have weaned themselves from Delphi as a sole source supplier long ago or at least reduced their dependence to the point where having them strike or fail couldn't bring down the whole company. Now it appears that a strike would burn what cash they have in 3 months or less. As I said in a prior post it's time to throw down the gauntlet. The golden goose is dying and if the union is stupid enough to finish it off by striking so be it.

Oh, they have...Delphi won't be their major supplier much longer..

[daves87rs]

Just the kind of attitude that killed the unions... like I said "we vs. they."

Sorry but you're not based in reality when you say "no one does a better job..." In fact nobody HAS to do it better although there are those would argue there ARE some that ARE doing it better. All that's required is to do it just as well and for a lower price. This puts any union shop at a disadvantage and will eventually put GM out of business unless all its competitors are unionized. Otherwise the game is over.

"Cheap tacky products?" This comment is totally ridiculous. Suppliers build what they are told to build to the specs they're told to build to. If you want to complain about "cheap tacky products" you'd better complain to GM. They are to blame for producing poor specs and/or for accepting inferior product. Either way they own it.

If you want to blame someone for "corporate greed" blame the stockholders (which somehow I'm sure as a unionized employee you own stock) for not standing up for yourselves and ALLOWING GM to pay all kinds of ridiculous money to these morons while GM continues to lose money and market share. Who pays big money for poor performance? Well truth be told lots of companies do in the US.

You're probably a Democrat.

Cheap tacky Products?"- Well, that can be mostly true...

Then I guess you have seen how bad they are first hand.....

It's funny that someone said something about key-fobs....

[daves87rs]

Speaking of suppliers......Lear...ohhhhh BOY!!

[Guest flowmotion]

How to break a Union in four easy steps:

1) Take half your profitable union operations and spin them off into a separate company that is structurally unprofitable

2) Force the new company to compete for business against non-union suppliers, making it even more unprofitable.

3) When the new company finally goes tits-up, reveal that backup suppliers have been secretly established for everything they were doing.

4) Your existing Union employees will see their former colleagues on the unemployment line and get the message loud and clear. If not, go back to Step 1.

[ellives]

Unions are about strength. Strength of the union and strength of the organization being unionized. Without strength in one side or the other, the union idea fails. I don't see GM in a strong position these days but I *do* see Toyota there. Hint. Hint.

How to break a Union in four easy steps:

1) Take half your profitable union operations and spin them off into a separate company that is structurally unprofitable

2) Force the new company to compete for business against non-union suppliers, making it even more unprofitable.

3) When the new company finally goes tits-up, reveal that backup suppliers have been secretly established for everything they were doing.

4) Your existing Union employees will see their former colleagues on the unemployment line and get the message loud and clear. If not, go back to Step 1.

[SoCalCTS]

How to break a Union in four easy steps:

1) Take half your profitable union operations and spin them off into a separate company that is structurally unprofitable

2) Force the new company to compete for business against non-union suppliers, making it even more unprofitable.

3) When the new company finally goes tits-up, reveal that backup suppliers have been secretly established for everything they were doing.

4) Your existing Union employees will see their former colleagues on the unemployment line and get the message loud and clear. If not, go back to Step 1.

One problem with this. The public largely supports unions. In California a few years back there was a supermarket strike. The markets locked-out the union employees trying to bust the unions. The public refused to shop at those stores. Now Albertson's one of the big 3 supermarket chains had to sell itself or go out of business because it never recovered. Don't underestimate the public sympathy for unions.

[goblue1999]

&#036;h&#33; is going to hit the fan. There's absolutely no way around it.

It's going to be ugly, very, very ugly.

They absolutely need to force the Union to strike.

Then, the ONLY option is to hire replacements, which would become PERMANENT replacements rather quickly. GM would then have to do the same thing, and the whole problem, and the UAW, just goes away.

[ellives]

Pure rubbish. The public does not largely support unions. If they did the unions in general would not have experienced the steady decline they have over the last 30 years (with small exceptions.)

The reason the public refused to shop at those stores is intimidation and the natural tendency to want to avoid confrontation. Simple as that.

No one is going to debate the damage to Albertson's. It's one of the risks of drawing a line in the sand. In GM's case I don't see that they have any other option. The UAW needs to go after Toyota with their guns blazing.

One problem with this. The public largely supports unions. In California a few years back there was a supermarket strike. The markets locked-out the union employees trying to bust the unions. The public refused to shop at those stores. Now Albertson's one of the big 3 supermarket chains had to sell itself or go out of business because it never recovered. Don't underestimate the public sympathy for unions.

[Guest flowmotion]

CTS -- After the big SoCal grocery strike, the NorCal unions basically folded. So, it wasn't a total disaster for the companies.

Also, the strike will be at Delphi -- I'm not sure if people will connect that to Chevy/Pontiac/SAAB/etc. There will be no picket lines to cross. Probably very little public backlash.

Sorry if I sound cynical, but it looks like GM is in the process of dumping half their union workers ... and getting away with it.

[CaddyXLR-V]

One problem with this. The public largely supports unions. In California a few years back there was a supermarket strike. The markets locked-out the union employees trying to bust the unions. The public refused to shop at those stores. Now Albertson's one of the big 3 supermarket chains had to sell itself or go out of business because it never recovered. Don't underestimate the public sympathy for unions.

Do they support them? Or are they just afraid, or want to avoid crossing them to get in the store?

[ellives]

Do you really blame GM? I dont' see how you can if you're being honest. GM needs to survive and they can't do it in the current conditions. Something has to break. No matter what you feel about unions, basic economics tells you GM needs to do something about their cost structure.

Using the words "getting away with it" makes it sound like they're doing something illegal. They're not. If you want to blame somebody, blame the politicians for lowering the trade barriers and the unions themselves for not unionizing the non-union shops like Toyota and Honda.

CTS -- After the big SoCal grocery strike, the NorCal unions basically folded. So, it wasn't a total disaster for the companies.

Also, the strike will be at Delphi -- I'm not sure if people will connect that to Chevy/Pontiac/SAAB/etc. There will be no picket lines to cross. Probably very little public backlash.

Sorry if I sound cynical, but it looks like GM is in the process of dumping half their union workers ... and getting away with it.

[Guest flowmotion]

Using the words "getting away with it" makes it sound like they're doing something illegal. They're not.

<{POST_SNAPBACK}>

Actually, I do question the legality of spinning-off Delphi if the company was structurally designed to fail (which it seems it is).

Although, I'm not really into blame. Automotive is the last stronghold of NA Union manufacturing, and it was only a matter of time before it was dismantled by the forces of capital. (Even if GM's problems run a lot deeper than their labor costs.)

[ellives]

They're no different than any large organization with huge market share and tons of money running around. Corruption takes over and everybody grabs for their piece of the pie. The problem always becomes the fact that deals and expectations far outlast those who agreed to them and then eventually the trouble brews.

In a lot of ways GM's situation could be paralleled with the US government. The country has been sold out over the years and now we're going to have to pay the price.

Actually, I do question the legality of spinning-off Delphi if the company was structurally designed to fail (which it seems it is).

Although, I'm not really into blame. Automotive is the last stronghold of NA Union manufacturing, and it was only a matter of time before it was dismantled by the forces of capital. (Even if GM's problems run a lot deeper than their labor costs.)