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Trouble - USA - A Bumpy Road for Delphi, GM and U.S. Auto Workers
Analysis: The Knowledge/The Wharton School Team/ Penn. UniversityPennsylvania,USA --21 Oct. 2005: -- ... One thing became clear: the road ahead is going to be bumpy not only for Delphi, but also for General Motors, the United Auto Workers and the federal Pension Benefit Guaranty Corp., the government-run entity that stands behind defined-benefit plans when they are terminated... Experts at Wharton and elsewhere who follow the auto industry say Delphi's decision to file for bankruptcy was hardly surprising but nonetheless significant. Also important was GM's subsequent announcement, that it had reached a tentative agreement with the UAW to cut the healthcare benefits of unionized retirees... The Delphi filing and the tentative GM-UAW accord set in motion a chain of events that may forever alter the relationship between America's Big Three carmakers and the UAW, and they underscore the degree to which globalization is exerting downward pressure on the wages and benefits paid to U.S. workers... Wharton management professor John Paul MacDuffie says Delphi's problems -- and GM's for that matter -- do not stem directly or entirely from the legacy costs or high wages paid to current workers. A major part of Delphi's difficulty is that it remains too dependent on a weakened GM as a customer for its parts... But there were tough problems, too -- inefficient businesses and pressure to sell some parts to GM at less than cost... GM's future is intertwined with Delphi's because GM became responsible for Delphi's legacy costs once Delphi filed for bankruptcy... Since the spin-off from GM, Delphi has made many positive changes of the kind that auto parts manufacturers need to make to stay competitive in global markets, according to MacDuffie, who is also co-director of the International Motor Vehicle Program (IMVP), which has a network of researchers at universities worldwide and is funded by major automakers and suppliers... Helper, the economics professor at Case Western Reserve, hopes that the Delphi bankruptcy also starts a national debate over the immense changes that globalization has brought to blue-collar union families that worked for decades to earn middle-class wages and rock-solid benefits...
posted by Unknown @ 3:18 PM
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