Delphi Deadline Draws Near - The Car Connection

March 30: Today is Showdown Day in UAW-Delphi Battle

Today is the deadline that Delphi CEO, Steve "Pompatus of Bankruptcy" Miller set for coming up with a wage agreement with the UAW. According to press reports, the UAW rejected Miller's last offer without even sending it to the membership for a vote.

Delphi's next step is to apply for bankruptcy court approval to void the Delphi/UAW collective bargaining agreement. UAW officials have indicated that such a move would automatically provoke a strike. The UAW reaction is harsher than I would have expected.

A couple days ago, I predicted that UAW would not strike after seeing the proposal that was on the table. That proposal included a lump-sum payment by GM of $50,000 (at least to some workers); and wages that would be reduced immediately from $27 to $22 per hour with reduction in a year and a half down to $16.50.

Personally, I think it would hurt the UAW over the long term if it strikes Delphi. It is estimated that a Delphi strike will cost GM as much as a billion dollars per week. Consider that the costs of the proposed buy-out plans for the GM and Delphi workers is estimated to cost $5 billion give or take a billion or 3, a a few weeks of an ill-considered strike can rob GM of the cash that would otherwise provide an entire generation of General Motors (and Delphi) workers a level of economic security that the average Jane or Joe Blow just doesn't have and never will have. (Run-on sentence intended.) What will the Delphi workers get in return? They will get nothing except the satisfaction (if you can call it that) that they weren't bullied into taking a pay cut. They can take that satisfaction with them to the unemployment office because at the end of the strike Delphi will be gone along with their jobs.

If the strike kills Delphi and GM, there's no way that any of the transplant workers will ever vote for UAW representation. The UAW will slowly drift further into irrelevance and eventual extinction.


Delphi Deadline Draws Near - The Car Connection