GM lines up backups for Delphi

[Len_A]

From this weeks Automotive News:

 

GM lines up backups for Delphi

Suppliers are prepared to step in if strike puts production in peril

 

By Robert Sherefkin

Automotive News / November 28, 2005

 

DETROIT -- General Motors is quietly lining up suppliers to keep its assembly lines running in case of a strike at Delphi Corp.

 

A senior GM executive says the automaker has begun validating components made by backup suppliers.

 

Delphi ships $15 billion in parts annually to GM. A strike could trigger parts shortages and disrupt GM's North American assembly plants within days.

 

"Delphi poses a risk," says the GM executive, who requested anonymity, "and there may be a strike. But if it's long, we could re-source a lot of stuff to other vendors."

 

But in an era of just-in-time parts delivery and single sourcing, GM may have limited ability to protect itself. Even a brief suspension of deliveries from Delphi could disrupt production.

 

Neil DeKoker, president of the Original Equipment Suppliers Association, says it would be almost impossible to replace Delphi production in time to avoid a shutdown.

 

A strike could happen as early as Jan. 24, the hearing date on which a bankruptcy judge could give Delphi approval to eliminate its union contracts. But a ruling likely wouldn't come until February.

 

UAW President Ron Gettelfinger called Delphi's most recent proposed cut in wages and benefits "a road map for confrontation," and says he won't even take it to the membership for a vote. A popular rank-and-file UAW Web site on Nov. 23 said members "believe a strike is inevitable" at Delphi.

 

Delphi wants to cut wages for its 34,000 hourly workers from an average of $27 an hour to as low as $12.50 an hour. The UAW represents 24,000 of those workers.

 

GM purchasing spokesman Tom Wickham declined to elaborate on the automaker's contingency planning. He says GM routinely monitors its supply chain for potential disruptions and has identified backups.

 

But in Securities & Exchange Commission documents filed after Delphi's Oct. 8 filing for Chapter 11 reorganization, GM said it is "exposed to the risk of supply disruptions caused by labor strife at Delphi."

 

GM wants to safeguard the launch of three large SUVs scheduled to debut early next year on its new GMT900 platform. The company hopes the models will jump-start its sagging sales. Production of the Chevrolet Tahoe, GMC Yukon and Cadillac Escalade begins Monday, Dec. 5.

 

So far GM has seen no disruption of parts from Delphi. And Wickham says there is no reason to expect delays or missed shipments.

 

De Koker says validating parts is a long and difficult process under normal circumstances. Since suppliers must invest considerable time and money to certify components, he says, it would be tough to get a commitment if a contract isn't guaranteed.

 

Plus, De Koker says, it can take 26 to 50 weeks to make the various tools needed to produce parts.

 

Tooling could be a big obstacle. Even if GM owns the tools, moving them to a backup supplier can be risky, as GM learned in May 1998.

 

Anticipating a strike at its Metal Fabricating Division plant in Flint, Mich., GM moved dies to a plant in Ohio. The UAW considered that a belligerent act.

 

The transfer helped ignite the 54-day strike that shut down most of GM and cost it $2 billion. c

 

Philip Nussel and Jamie LaReau contributed to this report

 

You may e-mail Robert Sherefkin at rsherefkin@crain.com

[imageneral]

And this is exactly the reason why sitting on their asses and not striking right away will let delphi get the wage concessions they want. I know their are alot of reasons why they couldnt strike right away but now the UAW edge has been lost..even if there is a strike now...gm has got the backup plan up and running and can and will be able to produce if there is a strike. I see us losing our middle class way of life in the very near future folks......better prepare now!!! :unsure:

Edited November 28, 2005 by imageneral

[wildosvt]

And this is exactly the reason why sitting on their asses and not striking right away will let delphi get the wage concessions they want. I know their are alot of reasons why they couldnt strike right away but now the UAW edge has been lost..even if there is a strike now...gm has got the backup plan up and running and can and will be able to produce if there is a strike. I see us losing our middle class way of life in the very near future folks......better prepare now!!! :unsure:

 

 

I would not count on GM having a rock solid back-up plan. There is just WAY to much to deal with.

 

Look at it this way. How hard is it for you to train someone your job (which YOU know), Or better yet how long would it take for someone to actually "learn" the job. Tricks and tips kind of learning mind you.

 

Walk away form your job and let someone just walk up and do it, And do it right the first time. It wont happen.... Not without you. Now times you by 34K! See how big the mess is.

 

There is still a battle to be faught.

Edited November 29, 2005 by wildosvt

[dark270]

I would not count on GM having a rock solid back-up plan. There is just WAY to much to deal with.

 

Look at it this way. How hard is it for you to train someone your job (which YOU know), Or better yet how long would it take for someone to actually "learn" the job. Tricks and tips kind of learning mind you.

 

Walk away form your job and let someone just walk up and do it, And do it right the first time. It wont happen.... Not without you. Now times you by 34K! See how big the mess is.

 

There is still a battle to be faught.

 

 

YES, and we must fight the good fight.......

[Harry Bennet]

YES, and we must fight the good fight.......

There will be nothing good about this fight

The only people who benefit are the new workers who cross the line

There are not that many $12/hour jobs

 

The strike fund will be drained (I imagine within a year) and the management will carry on

 

Remeber the Detroit newspaper strike that became a lock out that became forgotten?

That is the template of how to regain concessions

 

What other likely outcome could happen?

The judge order Delphi to cut all executive wages 90%, bring everyone back, and continue COLA ?

Americans come out of the woodwork to buy UAW products and burn all rice burners ?

The masses riot and burn down the transplants and foriegn dealerships?

 

What can we realistically hope Gettelfinger can accomplish?

[electr]

Harry, sorry to disagree, but my son and his freinds are not having to much of a problem finding $12 to $15 an hour, especially if your willing to relocate. They are out there. The problems will be for those over 40.

[Pumpmaster]

There will be nothing good about this fight

The only people who benefit are the new workers who cross the line

There are not that many $12/hour jobs

 

The strike fund will be drained (I imagine within a year) and the management will carry on

 

Remeber the Detroit newspaper strike that became a lock out that became forgotten?

That is the template of how to regain concessions

 

What other likely outcome could happen?

The judge order Delphi to cut all executive wages 90%, bring everyone back, and continue COLA ?

Americans come out of the woodwork to buy UAW products and burn all rice burners ?

The masses riot and burn down the transplants and foriegn dealerships?

 

What can we realistically hope Gettelfinger can accomplish?

 

HarryTool, are you a UAW worker?

[Heywood]

HarryTool, are you a UAW worker?

 

Pumpmaster, why do you ask this question? What difference does it make whether he (or anyone) is a UAW worker? Are you suggesting that only UAW workers can comment on the job situation, the state of the UAW, the effects of strikes, or other issues that affect the auto industry?

 

I'm not trying to provoke you, just trying to find out where you're coming from.

[Maislebandit]

There will be nothing good about this fight

The only people who benefit are the new workers who cross the line

There are not that many $12/hour jobs

 

The strike fund will be drained (I imagine within a year) and the management will carry on

 

Remeber the Detroit newspaper strike that became a lock out that became forgotten?

That is the template of how to regain concessions

 

What other likely outcome could happen?

The judge order Delphi to cut all executive wages 90%, bring everyone back, and continue COLA ?

Americans come out of the woodwork to buy UAW products and burn all rice burners ?

The masses riot and burn down the transplants and foriegn dealerships?

 

What can we realistically hope Gettelfinger can accomplish?

 

The "good" can be identified as not accepting delphi's "answer" to fix the companies wrong. Delphi didn't get into trouble yesterday, nor should they expect to fix it overnight with such drastic measures aimed only at hourly ranks. Could they not come up with something a little more reasonable? The sacrifice being asked here is a bit much for any one to swallow. What would you do if your SALARY was cut in half? Not to mention loss of whatever bennnnies they decide to cut also.

 

Like Wildo said, the "scabs" would not be able meet obligations to GM. It's the little things that experience dictate that make the difference between making a quota or not. Also, if you think things like attendance are a problem now, what will you have at $12.50? Then you have to deal with the turnover- the plants will become stepping stones to better jobs.

 

GM will go BK b4 strike fund runs out. Nothing for management to carry on, except a resume.

 

This isn't the newspapers- get a clue. :P

 

Do you really belive that when costs for basic living go up that a workers pay should stay still? Perhaps we should go back to $5 a day, huh?

 

And finally why is there anything for the UAW president to "accomplish"?

This companies problems stems from it's "excretion" from it's parent GM from the get go.

These things needed to be addressed by the COMPANY from the start, not in BK.

The UAW and it's president do NOT make these decisions, so please get a clue!!! :P