Hamish on Delphi

[lehighguy]

Question for Hamish

As I understand it the compensation for the average Delphi laborer, factoring in benefits, was $65/hour. Seems rather excessive for that work. Now the company is bankrupt (there are other factors, but that is a big contributer).

Many of its business partners are also in huge trouble. GM will never be able to afford its pension obligations, and its debt just got downgraded to junk. I've looked at the numbers on that company and its a Ch11 waiting to happen.

Is pushing for excessive compensation, especially in the form of medical and retirement benefits, not a bad move on these unions part.

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Seems rather excessive for that work.

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I very seriously doubt that you have any idea what "that work" entails.

[Hamish McBagpipe]

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If Delphi successfully reorganizes by mid-2007, U.S. and Canadian workers would lose an estimated $2.1 billion in wages and benefits, the study said. That assumes the average hourly worker would make $14 an hour, down from $27 an hour now.

So far, Delphi and its unions haven't agreed on a new wage rate. According to a memo circulated by local union members, Delphi is asking the United Auto Workers and other unions to cut base wages to $9.50 to $10.50 an hour. Caroline Sallee, a senior analyst with the Anderson Economic Group, said the authors believed that rate was too low and unions will negotiate a higher rate.

The study also assumes that in the best-case scenario, Delphi would close at least 10 plants and employment would fall from 50,600 workers to 37,950 workers. Almost three-quarters of the workers cut would be hourly workers, the study said.

Delphi hasn't yet said how many plants it might close, but the company has placed 10 unprofitable plants in their own unit, and the study assumes Delphi would sell or close those plants in 2006. Four of the plants are located in Ohio. The rest are in Alabama, Indiana, Georgia, Michigan, Mississippi and New Brunswick, N.J.


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web page


Starting here. Gotta go.
web page

[lehighguy]

Given the line of business, lets say an "average worker" is making auto parts in a plant in Michigan.

$65/hour * 40 hours/week = $2600/week
$2600/week * 52 weeks/year = $135,200 / year

Yes, that seems excessive.

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Given the line of business, lets say an "average worker" is making auto parts in a plant in Michigan.

$65/hour * 40 hours/week = $2600/week
$2600/week * 52 weeks/year = $135,200 / year

Yes, that seems excessive.

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So, as I suspected, you have no idea what the average worker does. And you have no idea what the benefits are, so you have no idea what the real wages were. The management of GM and Delphi apparently did not believe the wages were excessive. But you know better, right? I'm sure you do. [img]/images/graemlins/smirk.gif[/img] [img]/images/graemlins/smirk.gif[/img] [img]/images/graemlins/smirk.gif[/img] [img]/images/graemlins/smirk.gif[/img] [img]/images/graemlins/smirk.gif[/img] [img]/images/graemlins/smirk.gif[/img]

[lastchance]

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[ QUOTE ]
Given the line of business, lets say an "average worker" is making auto parts in a plant in Michigan.

$65/hour * 40 hours/week = $2600/week
$2600/week * 52 weeks/year = $135,200 / year

Yes, that seems excessive.

[/ QUOTE ]

So, as I suspected, you have no idea what the average worker does. And you have no idea what the benefits are, so you have no idea what the real wages were. The management of GM and Delphi apparently did not believe the wages were excessive. But you know better, right? I'm sure you do. [img]/images/graemlins/smirk.gif[/img] [img]/images/graemlins/smirk.gif[/img] [img]/images/graemlins/smirk.gif[/img] [img]/images/graemlins/smirk.gif[/img] [img]/images/graemlins/smirk.gif[/img] [img]/images/graemlins/smirk.gif[/img]

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When the average worker in China will do it for around $10 a day, the value of the American worker is greatly inflated.

[bobman0330]

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Seems rather excessive for that work.

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I very seriously doubt that you have any idea what "that work" entails.

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It's heavy industrial, not breaking rocks in the desert. It's not THAT hard.

[Hamish McBagpipe]

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GM will never be able to afford its pension obligations, and its debt just got downgraded to junk.

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It looks like the UAW has just announced it will recommend the ratification of a deal that will result in small reductions in order to maintain its health care benefits. UAW Link

This is a good article describing bankruptcy protection as the newest way to get out of a mutually agreed upon collective agreement.web page

"Now it's the United Auto Workers' turn to feel the brunt of 21st Century America's definition of labor rights. Delphi, the largest auto-parts supplier in the country, just filed for bankruptcy protection. Before it did, management told the UAW that it wanted the union's members to swallow wage and benefits cuts of 60 percent. The UAW rejected this out of hand, as Delphi management knew it would. Now it's up to a bankruptcy-court judge to slash Delphi workers' wages, benefits and jobs.

How did we get to the place where labor rights are so unprotected that bankruptcy-court judges are the arbiters of wages, benefits and working conditions in what are still some of our most important industries?

There are a number of answers. First are the judges who have simply assumed this role. Bankruptcy-court judges agreeing with management and tearing up union contracts as a matter of course is a recent innovation. This ability of corporate managers to easily abolish legal contracts sends a terrible message to society: We'll abide by contracts when they work for us, but not when they work for anyone else.

The second development fatally undermining labor rights is a federal government that, regardless of which political party is in power, consistently sides with management in labor disputes.When the pilots' union struck Northwest Airlines, in 1998, management knew it could be seriously hurt. It asked the Clinton administration to intervene. Using a provision of the law governing the transportation sector, President Clinton effectively outlawed the strike. Not surprisingly, the pilots' union agreed to management's terms.

Fast-forward to 2005: The union representing Northwest's machinists goes on strike. Management asks the Bush administration not to intervene, as management has a longstanding plan to replace the striking machinists and ultimately break their union. The Bush administration refuses to intervene, the strike goes ahead, and Northwest's machinists are replaced by temporary workers, paid far less than Northwest's full-time union employees.

The final development is a situation that affects nearly every employee and employer in the country: America's horribly mismanaged and inefficient health-care system. Analysts estimate that health-care costs add from $1,000 to $1,500 to the price of every automobile produced in the United States. Manufacturers in no other advanced economy face these costs, since health care is funded by their national governments. "


What the article doesn't describe is how the heck could it get to the stage of $65/hr wage cost......