Delphi bankruptcy is aimed at union

Delphi Automotive Systems, the world’s second-largest automobile parts manufacturer, has filed for bankruptcy in Federal District Court in New York. Delphi is a giant corporation with 185,000 employees worldwide, annual sales of $28 billion and 33,000 unionized workers across the United States. It was created in 1999 when General Motors spun off its parts division. It is the major supplier for GM. Most of Delphi’s union workforce are former GM workers.

Delphi’s bankruptcy filing followed the United Auto Workers’ (UAW) rejection of outrageous demands made by the corporation. These included a 63 percent wage cut for the workers, from a range of $25-$27 to $10 an hour; the right to close, sell or consolidate its U.S. plants over the next three years; making Delphi workers pay 27 percent of their health-care premiums, up from 7 percent; cutting pensions by more than half, from $3,000 per month to less than $1,500 per month; drastically slashing holidays and vacations; and eliminating a job bank that guarantees workers continue to get paid during layoffs.

Delphi is now intent on implementing, through the bankruptcy court, its war on workers’ wages and benefits that were won through years of struggle.

Executives take care of themselves

Incredibly, Delphi’s bankruptcy filing came one day after it had sweetened its severance package for the corporation’s top executives, most of whom are paid $800,000 to $1 million a year. It now gua rantees them 18 months’ severance pay, instead of 12, even in the face of bankruptcy, and guarantees their bonuses as well.

These corporate executives are nothing but a pack of thieves and crooks. In fact, Delphi top management is being sued in federal court for fraud for cooking the books. Delphi’s top executive, Robert Miller, who is paid $1.5 million a year and received a $3 million signing bonus this year, is the corporate hack who steered the Chrysler bankruptcy in 1979. More recent ly, he was in charge of the Bethlehem Steel bankruptcy, which resulted in the company’s retirees being left with drastically reduced pensions and no health benefits.

The Delphi bankruptcy is meant to set the stage for dramatic reductions in wages and benefits for all parts workers in the automobile industry—and eventually for all auto workers. With its great tradition of struggle, beginning with the Flint sit-down strike of 1937, the UAW has been in the forefront of winning living wages and decent benefits for unionized industrial workers throughout the U.S. Dramatically lowering the wages and benefits of the auto workers will accelerate a dramatic reduction of living standards for the entire working class.

The automobile companies claim they cannot make profits and pay decent wages to their workers. But this is a boldfaced lie. In fact, last year Chrysler posted profits of $1.9 billion. General Motors reported profits of $3.2 billion in 2002, $3.8 billion in 2003 and $3.6 billion in 2004, and entered this year with a $25 billion cash investment fund. Delphi itself reported profits of $1.1 billion in the year 2000 and continued to report net profits through at least 2003.

Delphi’s current losses mostly result from the fact that its success is tied to that of General Motors. GM banked on continually increased sales of SUVs and trucks, where the rate of profit is highest, and put its production in that direction. However, because of the dramatic rise in the price of gasoline, sales of these gas guzzlers have gone down, resulting in losses for GM and for Delphi, its parts supplier. The current losses for GM and Delphi mostly have to do with changes in the current market and the poor management decisions, blinded by greed, that did not anticipate these changes.

Bosses attempt to restructure auto industry

Now, through its bankruptcy filing, Delphi is trying to take advantage of this episodic crisis to implement a fundamental restructuring of the automobile industry. The auto giants are not satisfied with their current rate of profit. New technology allows for the integration of global production on an unprecedented scale. To the corporate vultures, the UAW contracts, with their relatively decent wages and benefits, stand in the way of a new era of super-profits extracted by the super-exploitation of workers worldwide, including inside the U.S.

To challenge the dire threat to the union posed by the Delphi bankruptcy, the UAW leadership must mobilize its entire workforce. The struggle will not be won in the courts. The union needs to organize the power of the membership to fight for and assert the property right of the autoworkers to their jobs and to the wages, benefits and pensions they have earned through their years of sweat equity.

The Delphi workers, who supply GM’s assembly plants, have the power to stop production not just there but at General Motors as well, if they withhold their labor. If the bankruptcy court attempts to impose the kind of wage cuts and pension reductions that have been the pattern at United Airlines and so many other companies, the UAW should be ready to shut down the corporation and its parent GM as well.

If Delphi begins to shut down its plants, the autoworkers should prepare to occupy the factories, to protect the property that really belongs to the workers who made these plants run for so long. In fact, the union should demand that, as the representative of the workers who have given the most and have the most to lose, it be named the trustee to administer Delphi through the bankruptcy proceedings.

To send a message to Delphi, General Motors, the rest of the auto industry and the entire ruling class that the union will fight back against any attempts to fundamentally slash the wages and living standards of the auto workers, the union as a first step should invoke Article 50 of the UAW Constitution. This provision authorizes a referendum vote to call for a general strike of the entire union membership when the “existence . . . [and] economic and social standing of our membership” is threatened. Just beginning this process of a vote on a general strike in every UAW local would send a message that the fight against this bankruptcy will not be limited to bourgeois channels, which inevitably result in disaster for the workers.

The organized power of the rank and file can defeat the Delphi bankruptcy and turn around the ruling class’s drive to lower the wages and benefits of the entire working class.

Goldberg worked for many years at Ford Motor Co.’s Michigan Truck Plant.