So says Robert “Steve” miller, CEO of Delphi as it filed for bankruptcy in an interview with the WSJ. He argues that almost every one of the ills that has brought down Delphi can be found in other U.S. automakers, airlines and other industrial corporations.
He says that companies like Delphi have become noncompetitive in the relentless globally competitive environment mainly because of the legacy costs that GM and other automakers have piled up during their sunny days of monopoly in the 60’s and 70’s.
Miller knows whereof he speaks. He joined Lee Iacocca in the rescue of Chrysler.He presided over the bankruptcy of Betlehem Steel before turning that dead hulk over to his friend and mentor, W.L.Ross.He was also present at the bankruptcy of Federal Mogul, another automotive supplier. He is now on the board that oversees the bankruptcy of United Airlines.He is also on the board of several corporations.He has earned his stripes as a remorseless cost cutter.Lest we think he is one heartless SOB, he begs to differ.He says he has to do this to make our corporations competitive and save the jobs worth saving.
In his drive to save Delphi, he has asked the workers to accept wages from $9-10 per hour a steep decline from their current $27-30 per hour wages and generous benefits.He plans to close many of Delphi’s North American plants and have the work performed overseas, mainly in India and China and we know what that means.This will go on until Miller gets rid of all the pension and health costs for past and present employees.That will make the company attractive to people like W.L.Ross, a vulture hovering over the near dead carcass of Delphi.W.L.Ross was an admirer, needless to say, of Miller and has expressed an interest in picking up Delphi after its legacy costs, pensions and benefits are stripped and the corporation is made more “valuable”.And, the Indian billionaire, Laxmi Mittal, who bought a portfolio of bankrupt steel companies from W.L.Ross, is said to be interested in picking up a similar portfolio of auto parts companies from his old friend, W.L.Ross.The world has indeed become a small place, may be even flatter, as Tom Friedman would say.Everything that stands in the way of these men is being flattened.
