Associated Press this morning is reporting that Delphi Corporation, the world’s largest auto parts maker has files for bankruptcy in federal court in order to beat the deadline in late october when the new bankruptcy law takes effect.This filing is significant for several reasons.First, it throws all the legacy costs of Delphi (retirement and medical benefits) back in GM’s lap per their agreement when Delphi was spun off by GM.At a time when GM is least able to handle such costs because of its own dire straits, this would be like throwing an anchor to a sinking man.If GM’s sales do not keep up, a bankruptcy filing cannot be ruled out for GM in the near future.It is a foregone conclusion that GM will be hit hard in the marketplace because all its new models are heavily weighted toward large SUV’s and trucks which have become overnight dinosaurs, thanks to Bush’s Iraq invasion and Katrina/Rita’s pounding of the refineries.
As it stands, many smaller suppliers to Delphi throughout the Midwest are likely to be hit hard, forcing many to go under.The workers at Delphi who have been given an ultimatum to accept a wage cut equivalent to 2/3 rd of their current rates, down to $10 an hour and reduced medical benefits will be forced into the wall.The retirees will be simply out of luck.Many, having invested an entire lifetime at Delphi, will have no means of retirement except Social Security which, thanks to Bush and his Republicans, will be under assault too, again and again.
With this, one can think of Bush having achieved the Trifecta that he is so fond of talking about:9/11,New Orleans and the liquidation of the American auto industry.Indulging in a little gallows humor this morning.
We in the Midwest believe our goose is cooked.