HOW HE SEES IT Delphi bankruptcy plan rewards company execs

By HENRY REICHARD
SPECIAL TO THE VINDICATOR
Delphi's new "and temporary" CEO, Steve Miller, the mastermind behind the largest industrial bankruptcy in U.S. history and the instigator of an attempt to wipe out workers' contracts in the auto supplier industry, has been quoted as saying he can't sleep at night from worry over workers' welfare. A guilty conscience, perhaps?
There is no question that forces such as global competition and rising health care costs have made it more difficult for Delphi to turn a profit. But the facts just don't support Miller's contention that if only Delphi didn't have to deal with union contracts, all would be well.
IUE-CWA has been negotiating competitive agreements with Delphi, both pre- and post-spinoff from General Motors, for more than 20 years. We've negotiated competitive health care and pension coverage, agreed to tiered wages and embraced flexibility in the workplace.
Dubious track record
In exchange, Delphi was supposed to keep its promises to workers. Instead, workers are being asked to shoulder all of the blame for Delphi's troubles, and all of the costs, while executives and management seek rewards despite a dubious track record. Bad product placement decisions, excessive management-to-worker ratios and scarce capital investments made sure the potential of IUE-CWA's competitive agreements was never realized.
My union even offered to structure an agreement around a business line if Delphi brought new work into a plant, but Delphi never took us up on the offer. Maybe it was too busy trying to contain its accounting shenanigans, disguise its "irregular" dealings with suppliers and then deal with the resulting SEC investigation. Or, maybe Delphi was too focused on making the case for bankruptcy so it could permanently reduce wages and benefits across the board and potentially dump its pension costs on taxpayers.
Other U.S. auto parts suppliers pay livable wages and benefits and make a decent profit. Could it be because they aren't saddled with the high corporate overhead? Delphi should take the same knife it used on the workers' contract to its corporate lifestyle and overhead costs. Bold statements about Miller working for $1 a year don't have quite the same impact when it's learned that the $1 salary accompanies a $3 million bonus.
For some 70 years Delphi's workers have struggled to build a decent standard of living. And along the way they built up living standards and job opportunities for working families across America. A single manufacturing job creates up to four additional jobs in related industries. This bankruptcy will harm not only Delphi workers, but communities, small businesses and others. And, if Delphi succeeds in drastically lowering its labor costs, the rest of corporate America is sure to jump on the bandwagon in slashing wages and benefits.
Poverty line
Given Delphi's drive to significantly cut workers' wages and slash benefits, who will be able to afford to buy the products these companies produce? Those wages (for a job where you're sweating in 100-degree heat meeting exacting quality standards under sometimes dangerous conditions on a production line] will barely be above the poverty line for a family of four. I guess the economy will just have to rely on executives and management, who, if Delphi has its way, will get large bonuses and a 10 percent equity stake post-bankruptcy.
IUE-CWA and other unions have long known that our largest challenges can't really be solved at the bargaining table. The truth is that Delphi's problems can't really be solved in the bankruptcy court. It will take political action to negotiate and enforce fair trade deals and to address the crisis in affordable health care.
Are there workers who make $65 an hour for cutting the grass, as Miller so famously stated? No, of course not. Even he admits that it's just an accounting choice to dump pension and legacy costs onto each worker to reach that figure. But if there were such workers, at least at the end of the day the grass is cut. And they can sleep at night knowing they did an honest day's work instead of spending their hours scamming workers out of their wages, pensions and benefits so executives can get millions in bonuses.
X Reichard is chairman of the Automotive Conference Board of the International Union of Electronic Workers, an affiliate of the Communications Workers of America. IUE-CWA represents 8,500 workers at Delphi.