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Friday, December 19, 2014
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Published: Thursday, 10/20/2005

Delphi news spreads chill throughout work force

Is the American middle class in its death rattle?

Many believe so. Obituaries are everywhere. The epitaph?

Good-bye to all that.

Good-bye to a work life that begins in a factory right after high school graduation and which requires no training.

Good-bye to wages that let working-class people save enough for a down payment on a nice-but-not-fancy house in a safe, quiet neighborhood.

Good-bye to wages that can feed a family and still leave a little something at the end of the month to set aside for the kids' college education.

Good-bye to old-age pensions and health care.

Good-bye, for that matter, to paychecks big enough for workers to afford the very products they work each day to make.

For a city like this - a city built largely on the hourly wages of people who went off to "the plant" each day under the protective umbrella of generous union contracts - that's one painful prospective good-bye.

But as the sobering implications of Delphi Corp.'s bankruptcy announcement continue to sink in, the message couldn't be clearer: That "global economy" people have yakked about for years is now nightmare-vivid in cities such as ours.

After World War II, a robust American economy transformed this country into the only place on Earth where working-class people lived middle-class lives. And much of that transformation was a result of auto manufacturing - the industry (and the product itself) the very epitome of America's big-shouldered, broad-chested dynamism.

Will history eventually tell us this was but a fluke, a 20th-century economic aberration?

Delphi (an auto parts supplier spun off by General Motors on the eve of last century's end) is our biggest auto-parts manufacturer, and its executives say they need concessions to stay alive. Workers could go from an average hourly wage of $27 down as low as $10.

That's a long dive into the icy waters of service-sector wages, which could plunge Delphi's 30,000-plus workers into the world of the so-called "working poor."

This, while the poverty rate climbs and median income falls.

The Economist reported that one reason Delphi sought protection now was to avoid more stringent bankruptcy regs that went into place this week.

"Another reason suspected by many in Detroit," the magazine added, "was that GM urged Delphi to enter Chapter 11 in order to send a signal to the United Auto Workers union."

Already this week, the UAW is wrangling with GM about a tentative agreement with the auto maker to lower its health-care contributions by $1 billion.

But pay rates and, especially, benefits obligations plague not just auto makers, but industries across America. Long answer short: Mexican and Chinese workers and retirees don't enjoy American-style defined-benefit pensions and health care.

These past weeks, we've distanced ourselves even farther from Henry Ford's earth-shaking 1914 decision to double his assembly workers' pay so they could afford the Model Ts they produced.

Good-bye to all that, indeed.



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