Replies to post #13237 on FinancialAdvisor's College Class (FACC)

[FinancialAdvisor]

*That's really unfortunate man, seems to me the era of American-based manufacturing jobs is coming to an end... We'll find out soon enough how this affects our overall economy, but something tells me that people without jobs is not a good thing going forward unless they can find other work which has equal pay...

[FinancialAdvisor]

GM parts supplier Delphi plans to axe 24,000 jobs: reduce hourly wage from $27 to $9; pay managers bonuses worth $90m

GM parts supplier Delphi plans to axe 24,000 jobs: reduce hourly wage from $27 to $9; pay managers bonuses worth $90m
By Finfacts Team
Nov 20, 2005, 17:11

Former General Motors parts unit Delphi, which is in bankruptcy protection, has said that it will close all its US plants unless trade unions agree to wage cuts to rescue America's largest auto parts-maker.

Delphi CEO Steve Miller, who received a signing-on hello bonus of $3.7 million last summer, said that he hasn't received union counteroffers to his proposal, which includes reducing wage levels from an average $27 per hour to as low as $9 and slashing up to 24,000 jobs over a three-year period. Motor union UAW President Ron Gettelfinger called Delphi's offer an "insult."

"We are going to try and save as many jobs as we can, but at the current wage rates, we would have to close down all of our US plants," Miller said. Delphi will pay an average US wage of $26.97 an hour in 2005.

Delphi was spun off from General Motors in 1999 and a strike could cripple both the parts maker and its largest customer GM.

Last Wednesday, loss-making General Motors' stock fell to a 14-year low - it fell 6 percent to $21.29, its lowest level since 1991 and embattled chief executive Rick Wagoner was compelled to issue a statement to employees that the company has "absolutely no plan, strategy or intention" to file for bankruptcy. Despite the firmness of the intentions, there is a Custer's Last Stand feeling about the strugggle of the onetime icon of industrial America, to pull the fat from the fire.

Delphi filed for court protection in October after Miller failed to win concessions from unions and financial help from former parent General Motors. Miller has said he will ask the bankruptcy court to let the company impose terms if unions don't agree to pay and benefit reductions by December 16th.

The UAW, along with Delphi's other trade unions, said its primary focus in coming weeks will be to expose and challenge generous executive compensation packages Delphi is proposing for senior management.

Delphi plans to pay almost $90 million in bonuses for 486 top managers as a fair reward if the company emerges from bankruptcy. It also said a recently improved severance program is necessary to keep 21 key officers from leaving.

Last week, the unions lambasted the pay packages as a clear example of "corporate greed" and a sign of Delphi's insensitivity to the plight of the factory workers who keep the company running.

"This fight is not just about 34,000 Delphi workers," said Henry Reichard, automotive conference board chairman at the International Union of Electrical Workers union, which represents 8,500 Delphi hourly workers. "What's at stake here is the survival of the middle class."

Under the latest Delphi proposal, the average production worker would earn a base wage of $12.50 an hour, but the starting wage for new workers could be lower. The company also said that it would improve a health care package proposal.

The entire package would be worth $21 an hour, down from about $65 an hour today, Delphi spokeswoman Karen Healy said.

"We think it's competitive," she said. "It's similar to our competitors, many of whom have employees from the same unions."

Meanwhile Ford Motor Co. said Friday that it plans to cut 10 percent of its North American white-collar work force as part of its retructuring effort in the face of slowing car sales. The bulk of the job cuts will be from salaried workers during the first quarter of 2006, Mark Fields, President of Ford's American business unit said.

Ford is spending $3.1 billion annually to provide health care for 550,000 employees, retirees and dependants and has complained that the burden is impacting competitiveness.


LINK: http://www.finfacts.com/irelandbusinessnews/publish/article_10003987.shtml