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.
Even though this is no surprise it’s hideous none the less. I really am afraid of what is happening to the country-all the workers and especially so many that worked all their lives with the hope of a decent retirement(like people from Enron)and now will be left with almost nothing.
In another diary I have called this the Economic Tsunami, in which many of us are going to get caught through no fault of our own.Delphi is going to start the process of fallin dominoes, GM, Ford, Visteon and many other suppliers, small and large.
Today marks the beginning of the end of the U.S. auto industry.One can see the remarkable resemblance of Detroit to Pittsburgh as it too went through gut wrenching changes in the steel industry in late 70’s and mid 80’s.
I read that diary and you’re absolutely right. I’ve been telling my sister for years(since bush’s first term)that there will be nothing left of this country when he gets out of office.
We’ll be a MacCinoland..all fast food/gambling and motels…although now I’m beginning to even wonder if that’s possible with no one left with any real wages to be able to even eat at fast food places and go gambling.
It’s very very scary what is happening to our economic structure in the country.