I Am Outraged About Global Competition!
[Michigan] Governor Jennifer M. Granholm today issued the following statement on the announcement that Delphi has filed for Chapter 11: I am profoundly disturbed by Delphi's decision and what it means for the nearly 15,000 Michigan employees, many of whom have worked for decades for the company based upon the promise that they would have a pension and health care when they retired. Globalization is ravaging Michigan's manufacturing job base. Delphi's decision will undoubtedly have a ripple effect through Michigan's economy — an economy already reeling from outsourcing.
I am angry that this action occurs one day after headlines blared that Delphi employees were being asked to accept brutal, draconian pay cuts while upper management is being offered golden parachutes. I am equally angry about the lack of support from Washington for the industries that made our country great. There is an apparent indifference in Washington to the human pain that so-called free trade has brought to average, patriotic, hardworking citizens who believe in keeping promises. Moreover, the silence from the federal government is deafening. Washington negotiates these trade agreements and is not offering needed investment in either training our citizens or providing assistance with health care to allow both workers and businesses to be competitive. If we as a nation can invest billions in infrastructure at home and around the globe, surely we can invest in the human infrastructure — our American citizens — whose middle class dreams and plans are being rapidly extinguished by race-to-the-bottom global competition. - Governor Jennifer M. Granholm.
Mrs. Granholm, governments do not "allow" competitiveness. The efficiency fatcor of a particular business denotes its level of competitiveness in a free market. Bloated, bureaucratic, mismanaged operations such as Delphi cannot compete against leaner competitors. Those are the ABC's of Business 101.
Perhaps, Mrs. Granholm, you can ask Delphi's Big Daddy — General Motors — why it will not save its underling? Ford likely will not be cutting the umbilical cord to Visteon anytime soon, so why is it that GM is so willing to let Delphi fail? Hint: start with the health care beast, and go from there.
American auto companies endure a $1500/per vehicle in health care costs. It costs American auto companies almost 3x as much as their Japanese competitors to launch a new car . The Japanese plants can run several models through one plant, and the Americans? One or two, on average. In addition, GM lost $3.3 billion on its North American automaking operation in the first six months of the year. GM needs better, cheaper suppliers. If the Michigan labor force were to offer up a more competitive wage system —read: no unions — surely the automakers would not be fleeing to the South, Canada, and elsewhere. Were Northern, union workes less inclined to gut their companies via collective bargaining sanctioned by the government, perhaps plants in Michigan would cease to be closed so "mercilessly?"