<VV> Delphi bankruptcy - automotive but NO CORVAIR

NicolCS at aol.com NicolCS at aol.com
Sun Oct 9 14:31:46 EDT 2005

Management blames labor for making too much money
Labor blames management for making too much money
Some blame the government for not protecting the business
Some blame the Japanese for competing unfairly

What gets forgotten is that this is an ENTERPRISE selling goods or services 
that have a certain market value. If the cost of creating that good exceeds its 
value the enterprise fails when the money runs out.  GM spun-off Delphi since 
as a captive vendor they were losing money under that business model. As an 
independant firm they were supposed to be able to restructure to the point 
where they were able to survive.  In six years, management has not been able to 
turn that around for many reasons - they clain it's the labor and pension 
agreements.  They weren't able to get it fixed through normal negotiation, now 
through the power of a bankruptcy court they will.  Aside from the very sad effect 
this has on all the hardworking employees who signed-up for something better, 
the pension liability will either fall back on GM, which will sink GM OR it 
will fall to the taxpayers through the pension benefit guarantee fund - the 
likely outcome.

I read yesterday that the market cap for both GM and FORD is about $17B.  
Sounds good until you note that funky little Renault's is $29B and just barely 
recovered from the pit, Nissan's is $52B.  There has been some rumor of a 
potential purchase of GM or Ford by Renault, though CEO Goshn denies it.

As a Corvair fan and a GM fan and a taxpayer, this all makes me very sad.
C. Nicol

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