I consulted the Oracle at Delphi. Two different Delphis here, the auto parts manufacturer in Detroit and the ancient Greek city on Mount Parnassus. I was on Mount Parnassus, which is pretty rocky for street shoes and it turned out the Oracle was out for lunch, wouldn’t be back until two. Divining the future is union work these days.
But I was there to have the future divined for me about that other Delphi, the one in the auto parts business that plans to cut employee wages 75% so they can survive, if you can call that survival. The Oracle, in fact, confirmed my deepest suspicions. Said it was determined by the Board of Directors to be more cost efficient to turn their present employees into third-world wage earners than to actually physically move the plants to the third world. Besides, (most) present employees already spoke reasonable English. I asked him how he knew such modern lingo. "Hey," he said, "go with the flow is axiomatic in the oracle business."
When I asked how Delphi had come into such hard times in a mere six years existence as a spin-off, the Oracle told me he wasn’t a mind-reader, just a prophet and what did I think GM was doing when it spun off its parts manufacturing capabilities? He grinned, offered me a pickle he’d brought back from the deli. “Son, they were off-loading the liability of pensions, health benefits, life insurance and work-rules. How do you think this company lost a billion dollars a quarter? Eat your pickle and move along, I’m behind on my prophecies this week.”
So, you heard it here first, from the Oracle at Delphi about Delphi and now maybe the carving up of this huge, unprofitable organization makes some sense. It is, it seems to me, a precursor to the inevitable dismantling of the parent company, General Motors. But the gray skies are (as always) confined to the workers. Initial filings in bankruptcy court, recently made more stern for those of us who are mere private citizens, are a veritable smorgasbord of largesse in the corporate world, including
- Relief from an $11 billion shortfall in pension funding (which you and I will pick up as taxpayers)
- $21 million in incentive bonuses for top executives in the first six months, as they slash and burn their way through employee wages and benefits
- $88 million for the same purpose, when they are sold or emerge from bankruptcy*
- Gift distribution of 10% of the total shares in the company for their part in the slashing and burning once it’s complete
- Six figure ‘signing bonuses’ to newly hired executives (new president Robert S. Miller got $3 million in July)
*And emerge they will. Delphi’s annual sales approximate $30 billion and, with 185,000 employees’ slashed pay rates, their pension and welfare conveniently ‘disappeared’ and product pricing substantially unchanged, Delphi is sure to be the darling of Wall Street.
So, not to worry, all you employees soon to work for hamburger-flipping wages. Watson Wyatt, compensation consultant for Delphi’s lawyers, said approval of the executive incentive program would “improve employee morale.”
The ruins of the ancient city of Delphi were uncovered by the systematic excavations of the French Archaeological School, which began their work in 1893. The ruins of the modern manufacturing business named Delphi are currently being excavated in the bankruptcy courts by the legal archaeological specialists, Skadden, Arps, Slate, Meagher & Flom.