If anyone thought the era of unabashed corporate arrogance and greed had ended, what's happening at Delphi Corp. should set the record straight.
Delphi, the nation's largest auto parts supplier, filed for bankruptcy on Oct. 8, generating economic shock waves from coast to coast and teeth-rattling tremblers for thousands of workers in Michigan and Ohio. But it was the company's action four days before, on Oct. 4, that is every bit as noteworthy.
That was when Delphi notified the federal Securities and Exchange Commission that golden parachutes were being polished up for top officials whose jobs may be on the line as the result of the bankruptcy proceedings, even as the company demands huge cuts in pay, benefits, and pensions from its line workers.
New severance agreements call for top executives to receive their salary - plus bonus - for 18 months if they're let go. Previous severance packages lasted just 12 months.
The perks won't cover company chairman Robert S. (Steve) Miller, but his parachute already was well packed. Mr. Miller, who was brought in by the Delphi board to lead the company through bankruptcy, got a $3 million signing bonus. He makes $1.5 million a year.
Mr. Miller claims the severance agreements were necessary to keep his management team together as the company restructures. But fattening executive pay as personal financial catastrophe looms for those on the assembly line sets a new standard for corporate avarice. Michigan Gov. Jennifer Granholm, for one, called the proposed pay cuts "brutal" and "draconian."
If Mr. Miller has his way, many of Delphi's 33,000 U.S. workers will be laid off permanently. Those who remain, who now make $25 to $27 an hour, will be slashed to $10 to $12, with similar cuts in health-care benefits and pensions.
The only alternative, he says, is to have the bankruptcy court abrogate the company's union contracts.
"Some people insist that fairness requires that we slash wages across the board," he said. "Well, I'm sorry … There are large disparities in this country and around the world in what people can expect for mowing a lawn versus managing a huge business."
Mr. Miller may very well be correct that the sweep of globalization has priced highly paid, unionized workers in this country out of some world manufacturing markets, but to lay the entire blame on the workers is shortsighted and counterproductive.
At some point, those who manage global businesses will wake up to the fact that driving wages and benefits to rock-bottom levels eventually will leave them with far fewer customers able to afford their own products.
Not to be minimized either is the impact on communities that depend economically on Delphi workers, including Adrian, with 450 employees, and Sandusky, with 1,100. Delphi operations are spread out in 31 plants in 13 states. Most experts predict the fallout will be severe.
The U.S. auto industry has worked through painful downsizing in the past and survived, but there is a sense that the Delphi restructuring could portend a permanent and substantially lower standard of living for millions of American workers.
If Delphi goes down, can General Motors be far behind?