G.M. Spin Off
- Michael Fredericks, 34 year employee at
“Until Friday, severance packages for Delphi's white-collar employees were capped at 12 months of pay. But in a report to the federal agency that supervises publicly traded companies, Delphi said the top executives are now eligible for up to 18 months of pay and some of their regular bonus. That change does not apply to Robert S. (Steve) Miller, Delphi's chairman and chief executive, who works under an exclusive contract -- $1.5 million a year and a $3-million signing bonus -- he negotiated before joining the company earlier this year. But the changes were a result of a review of Delphi's compensation and benefit programs Miller initiated. The old separation policy ‘wasn't competitive’ for the top executives, said company spokesperson Claudia Baucus. Delphi's top five executives, not including Miller, were paid between $800,000 and $1 million last year, she said.”
- Mark Phelan, Detroit Free Press, 10/08/05.
“These are honest, loyal, hard-working people who took a job at GM or Delphi and played by the rules. They cannot be blamed for pursuing the American dream. They expected us to live up to our promises and we fully intended to deliver. All of us have been caught short by fast-changing global economics. Our people are being severely impacted. I don't blame them for being frightened, uncertain or even angry... It is a very difficult -- and a very humbling -- job to be the CEO of a company going through this transformation, knowing that my decisions will affect so many. I expect a continuing heavy barrage of criticism for my role here, but I will not shy away from facing up to the harsh realities of our situation... Globalization is a fact of life these days... What these three industries have in common is an implied social contract that has evolved over the past half century between oligopolistic competitors, in capital-intensive businesses, and fostered by workforces organized by strong centralized labor unions. With the enormous leverage inherent in the threat of prohibitively expensive work stoppages, unions in these industries were able to elevate their workforces above the standards enjoyed by most other Americans, while their employers passed along the costs to customers...traditionally defined benefit programs are an anachronism, and we are witnessing the slow agonizing death of defined benefits as industrial compensation policy. That is not all bad. First, the lack of portability of defined benefits forces people to stay with one employer, even though we have a much more mobile and flexible population these days. Second, the notion of having all your retirement eggs in one basket -- your employer -- is a concentration of risk that is simply ill advised for anyone in today's fast-moving economy. Finally, these programs have a way of toppling traditional large employers. No company should be making open-ended promises to its workers for events fifty years down the road. One of the more visible examples is GM, a junk bond credit these days as it staggers under a burden of $170 billion of combined pension and health-care obligations...Add to the mix that people are living longer these days. And medical science is rapidly expanding the capability to spend vast amounts of money to keep individuals alive for decades. Of course, that is a good thing. But the question is, how do we pay for it?...buy a Hyundai and get a satellite radio as an option. Buy a Chevy, and social welfare comes as standard equipment!...I would give the PBGC the flexibility, with approval authority vested in its board, to cut tailor-made repayment plans that reflect the needs of particular companies that fall behind. And I would give the PBGC what I call 'conventional weapons', including the right to negotiate covenants, collateral packages, benefit freezes, and other mechanisms to protect the interests of the PBGC from catastrophic failures. Right now, the PBGC has only the "nuclear option" of plan termination, which they use sparingly and only when all is lost...For some time, GM has been sagging under the weight of $80 billion in unfunded health-care obligations to retirees. Some have said GM is actually a giant HMO that happens to make cars!...We are reaping the harvest of years of putting more and more of our country's social costs on the backs of private employers.”
Robert “Steve” Miller, Delphi Corp. Chairman and CEO, remarks to reporters in
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