- The Washington Times - Saturday, October 29, 2005

Robert S. Miller, chairman and chief executive of bankrupt auto parts manufacturer Delphi Corp., said yesterday that car manufacturers and their workers are heading for a “historical collision point” over wages and benefits.

But Mr. Miller also sought to soften his message to company employees, alienated by his tough line on reducing hourly salaries, pension and health care costs.

“They don’t deserve this,” Mr. Miller said of the approximately 50,000 hourly workers in the United States who are facing an uncertain future.

Mr. Miller took the Troy, Mich., company into bankruptcy earlier this month, after it reported a loss of $741 million during the first half of 2005 and failed to restructure labor and pension costs with the United Auto Workers and General Motors Corp., the auto giant that spun off the parts maker in 1999.

Mr. Miller said it is no longer feasible for the Big Three automakers — GM, Ford Motor Co. and DaimlerChrysler AG — to maintain high wages and generous benefits for blue-collar workers.

“At one time in America a high school diploma and a job at the factory was the ticket to success, but no longer,” he told reporters in Washington as part of a public relations effort.

Unions have reacted harshly to Mr. Miller’s blunt assessments, saying he is trying to dismantle the American middle class.

“Maybe some believe the American Dream is over; the UAW rejects that dismal idea and will continue the struggle to fulfill that dream,” UAW President Ron Gettelfinger said Oct. 21.

Mr. Miller yesterday said wages, health and pensions cost his company $65 an hour, a rate at which the company’s factories are “toast.”

UAW leaders, meanwhile, have alluded to the possibility of a strike if Mr. Miller tries to force through difficult concessions, such as severe wage cuts — to as low as $10 an hour — as well as health and pension rollbacks.

Mr. Miller said he was confident that he could avoid massive plant closures as well as strikes.

“Nobody wants to end up [with a strike]. I believe we will find solutions that we can all live with,” he said.

But he said his company could not be competitive while other domestic companies pay workers less, and overseas companies pay a fraction of Delphi’s costs.

The company’s subsidiaries in Mexico, for example, pay hourly wage, pension and health costs that total $3 to $3.50 an hour.

Mr. Miller yesterday said policy-makers in Washington bore part of the blame for problems facing manufacturers.

He said Congress needed to act on pensions by tightening accounting rules that govern funding of the accounts, and he said he would lay out specific steps Congress could take on health care costs in the coming months.

“So there you have it. Delphi is a metaphor for nearly every economic and social issue gripping American manufacturing. These are huge problems that also present huge opportunities to at last confront our economic problems straight on and deal with them,” he said.

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