Who Lost Delphi - Road to the Middle Class

ON OCTOBER 8, 2005, Delphi, the auto parts supplier, became the largest US manufacturer to file Chapter 11 bankruptcy proceedings. Delphi is the parts division that General Motors spun off a few years ago.

The bankruptcy of Delphi will have serious consequences even if it survives. It will no doubt eliminate shareholders’ equity. It will severely cut workers’ wages and benefits. It will likely throw the company’s pension plan into the hands of the federal pension insurance system, resulting in major cuts in retiree pensions.

And, of course, there is the potential for a disruption in parts supplies to U.S. automakers.

Delphi is under criticism for awarding bonuses to its top executives before announcing bankruptcy. But CEO Steve Miller defends his actions saying

it was the only way to keep talented management needed to complete the restructuring.
"We pay hourly workers three times the market rate; salaried staff are paid a market rate and execs are paid below market," said Mr Miller.

So who lost Delphi? Was it greedy management asleep at the switch? Was it greedy unions that negotiated unsustainable wages and benefits by using their muscle power to intimidate the auto manufacturers? Is it the fault of foreign automakers competing with slave or sweated labor? Is it the fault of Congress that has given the labor unions monopoly powers that would never have been given to a corporation? Is it the fault of labor activists that have polished the image of labor unions over the years? Is it the fault of workers who insisted that their union leaders negotiate for wages and benefits that could never be sustained over the long term?

Or is it just the way of the world? Corporations are born, they grow and prosper, spinning out products to consumers and income to stakeholders. And then they grow old and die.

So which is it?

Sphere: Related Content |

Christopher Chantrill blogs at www.roadtothemiddleclass.com. His Road to the Middle Class is forthcoming.

TAGS

Chappies

“But I saw a man yesterday who knows a fellow who had it from a chappie that said that Urquhart had been dipping himself a bit recklessly off the deep end.” —Freddy Arbuthnot
Dorothy L. Sayers, Strong Poison

Civil Society

“Civil Society”—a complex welter of intermediate institutions, including businesses, voluntary associations, educational institutions, clubs, unions, media, charities, and churches—builds, in turn, on the family, the primary instrument by which people are socialized into their culture and given the skills that allow them to live in broader society and through which the values and knowledge of that society are transmitted across the generations.
Francis Fukuyama, Trust

Hugo on Genius

“Tear down theory, poetic systems… No more rules, no more models… Genius conjures up rather than learns… ” —Victor Hugo
César Graña, Bohemian versus Bourgeois

Education

“We have met with families in which for weeks together, not an article of sustenance but potatoes had been used; yet for every child the hard-earned sum was provided to send them to school.”
E. G. West, Education and the State

Faith & Purpose

“When we began first to preach these things, the people appeared as awakened from the sleep of ages—they seemed to see for the first time that they were responsible beings...”
Finke, Stark, The Churching of America, 1776-1990

Conversion

“When we received Christ,” Phil added, “all of a sudden we now had a rule book to go by, and when we had problems the preacher was right there to give us the answers.”
James M. Ault, Jr., Spirit and Flesh

Postmodernism

A writer who says that there are no truths, or that all truth is ’merely relative’, is asking you not to believe him. So don’t.
Roger Scruton, Modern Philosophy

Faith and Politics

As far as the Catholic Church is concerned, the principal focus of her interventions in the public arena is the protection and promotion of the dignity of the person, and she is thereby consciously drawing particular attention to principles which are not negotiable... [1.] protection of life in all its stages, from the first moment of conception until natural death; [2.] recognition and promotion of the natural structure of the family... [3.] the protection of the right of parents to educate their children.
Pope Benedict XVI, Speech to European Peoples Party, 2006

China and Christianity

At first, we thought [the power of the West] was because you had more powerful guns than we had. Then we thought it was because you had the best political system. Next we focused on your economic system. But in the past twenty years, we have realized that the heart of your culture is your religion: Christianity.
David Aikman, Jesus in Beijing

Religion, Property, and Family

But the only religions that have survived are those which support property and the family. Thus the outlook for communism, which is both anti-property and anti-family, (and also anti-religion), is not promising.
F.A. Hayek, The Fatal Conceit

Conservatism

Conservatism is the philosophy of society. Its ethic is fraternity and its characteristic is authority — the non-coercive social persuasion which operates in a family or a community. It says ‘we should...’.
Danny Kruger, On Fraternity

US Life in 1842

Families helped each other putting up homes and barns. Together, they built churches, schools, and common civic buildings. They collaborated to build roads and bridges. They took pride in being free persons, independent, and self-reliant; but the texture of their lives was cooperative and fraternal.
Michael Novak, The Spirit of Democratic Capitalism

mysql close 0