Monday, October 10, 2005

Delphi, a case of the executive union winning again

Here in Michigan the last few days the big news story is the bankruptcy of Delphi. This company is the second largest auto parts supplier in the world. A few years back Delphi was owned by General Motors but was spun off as a seperate company.

The news has been fast and furious in the past week. Last week Delphi told its union workers that they needed to take an approximate pay cut of 65%. Negotiations began, but they were never in ernest as Delphi was essentially saying that the pay cut was a "take it or leave it" proposition. This past Saturday Delphi lowered the boom and declared bankruptcy.

What happened on Friday was telling. Delphi gave 21 top executives severance packages that included 18 months of salary plus part of their bonuses if their jobs are to be eliminated, then Delphi promptly declared bankruptcy the next day. Isn't that special?!

This of course is not unusual for corporate America. When it's time to bail out, the thieves at the top make sure that their personal treasure chests are full of whatever money remains before they turn the company over to the bankruptcy court. Do they consider that the millions of stockholders will be soaked with losses? Do they consider that the funds the company has rightfully belongs to their creditors? Sure they consider it, but greed and self interest win out. Corporate America is absolutely corrupt and the bankruptcy laws allow it.

I've often wondered what is so special about these corporate leaders. They go to the best business colleges in the nation, many in the Ivy League, yet they so often end up running companies into the ground. These business geniuses can't seem to figure out how to avoid red ink. What the hell do they learn in these higher institutions? Apparently one major thing, to get paid handsomely for being failures.

Here's a telling statistic. American CEOs make appoximately 450 times the pay of the average worker in their companies. The next highest nation per this statistic is Britain at about 30 times the average worker. Japan, Germany and the rest of the industrialized countries are even less.

I think it's quite clear that the wrong jobs are being outsourced to other countries. While the jobs of the lowest paid in American companies continue to leave this country for lower wage nations, the workers with the salaries that are extremely higher than any other country in the world continue to be paid those outlandish stacks of dollars.

But I guess that's what our prestigeous business universities are teaching their students these days. Ignore their own high ratio of pay compared to other countries and to fixate on the lowest pay rates within their empires. And the most strangest thing is that these thieves are not even the rightful owners of these corporations, the stockholders are. Yet, when they decide to bankrupt the company the stockholders take huge losses, while the thieves loot the store just prior to their exit.

I'm of the opinion that the wrong union is being lambasted for their pay rates. These theives at the top are a union as well. They may not have a name for their union, but they certainly have a shared interest in their company, and that is to make sure they loot the burning building before they leave. I can't even count the number of times I've heard the phrase "unions are destroying America." The thing is that the statement is true, but the wrong unions are the target. The union destroying America is the Top Executive Club (TEC, I'll abreviate it as).

The TEC Union like to play at the same country clubs, buy mansions in the same exclusive neighborhoods, and shop at the same high end retail stores. They stand together, united. They don't sing "We shall overcome" they sing "We rule!"

They do rule. The TEC Union has friends in high places in America at another country club, the White House. When tax cuts are specifically directed towards the TEC Union (tax cuts for the rich) it's nothing but one rich union supporting another, solidarity, man.

How often I've heard that unions are corrupt. I won't disagree, the TEC Union is absolutely corrupt. Ken Lay (Enron), Bernie Ebbers (Worldcom), Al "Chainsaw" Dunlop (Sunbeam) are only a few of the crooks from the corrupt TEC Union that have been fingered, but so many more go unnoticed. In the White House we have Dick Cheney who continues to profit from his previous role as CEO of Halliburton. Google "George W. Bush" and "Harkin Energy" to find out how our president got away with not declaring his stock sales prior to corporate bankruptcy. Our corporate president was only a lesser player in the TEC Union in those days, but a member certainly to this day as his policies have been geared for the TEC Union.

Returning to Delphi, the hatchet man at the top of the Delphi TEC Union is Robert S. (Steve) Miller (note; Miller attended Stanford and Harvard, what a surprise). He will achieve his goals. He will force draconian pay cuts on the Delphi union, the UAW (United Auto Workers) or even force the union out of Delphi. He already has ensured his TEC Union will reap millions and then be rehired at high rates of pay. He will most likely shift many of the lowest payed jobs to other countries. When the banckruptcy dust clears, Delphi will be debt free and the stockholders will be fleeced (the stock is now below a buck and will be delisted from the NYSE).

I will state right here that I'm in favor of breaking unions, but the union I'm thinking of is the Top Executive Club. I just wish I knew how to do it.


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