A Detroit News article says the Chapter 11 filing of Delphi Corp., the world's second largest auto parts manufacturer, is an ominous sign for the auto industry.
At stake is the survival of Delphi, a global giant with 185,000 employees and annual sales of $28 billion, and the wages, benefits and jobs of its 33,000 unionized workers across the United States.
In its Chapter 11 filing in the U.S. Bankruptcy Court in New York, Delphi said a "substantial segment" of its U.S. manufacturing base will be sold off or phased out over the next two years. The company will also move to slash union wages up to 60 percent, cut health care benefits and free itself of pension obligations to tens of thousands of employees inherited when Delphi was spun off from General Motors Corp. in 1999.
It seems like a wave of bad news lately for the U.S. auto industry. High gas prices, layoffs and now the news about Delphi are making for a miserable situation for auto workers.
"They just snatched the American dream from thousands of people," said Don Thomas, a veteran of 29 years at a Delphi plant in Rochester, N.Y. "Nobody wanted to believe it until it happened."
His bleak assessment was echoed by Michigan Gov. Jennifer Granholm, who said she was "profoundly disturbed" by Delphi's decision to file for bankruptcy. The loss of hundreds of thousands of factory jobs in recent years has left the state with a 6.7 percent jobless rate -- one of the nation's highest.
The Detroit Free Press also has an article on Delphi's bankruptcy filing.
