Warm Southern Breeze

"… there is no such thing as nothing."

The Oracle at Delphi: Mitt Romney’s direct tie to increased unemployment in North Alabama

Posted by Warm Southern Breeze on Saturday, October 20, 2012

The average reader may not be aware that there was once a huge Delphi plant in Limestone county, Alabama, which facility was located directly across from Calhoun Community College.

American Industry... closed. - M1510 h712

Mitt Romney owned a significant interest in a firm that profited by laying off workers, dumping their pensions, moving to China, and then profiting rapaciously from the TARP bailout. That large plant – one among many, with the largest one being in Alabama – was the Delphi Steering Gear facility in Tanner, near Decatur, in Limestone County.

It was one of North Alabama‘s LARGEST employers – with emphasis on “was.”

The men & women who made careers there, whose labors enabled their children to attend college, provided their families’ clothing, groceries, housing & healthcare, and provided for their own retirement, and which was a union shop, was shuttered several years ago.

Most of what news I recall about it centered around how corporate traders, not unions, were wanting even more & more profit when they were already profitable. Time and time again, the workers took cuts in benefits & pay to keep their jobs for as long as they could… all to no avail.

Like a gazelle savaged on the plains of the Kalahari Desert in Africa, that once prosperous plant has been laid to waste, and there are only industrial skeletal remains. Even the human buzzards, scavenging metal for recycling from the industrial carcass, have left. For many years now, the hollow exterior hulk, instead of employees, materials & labor, has been drawing cobwebs, dust & rust. And soon, like all things left unattended, it too will crumble.

There are no taxes paid to Limestone county, or to nearby Decatur, Athens or Huntsville, or to Alabama for roads, schools, police & fire protection. But there is an even greater issue, one which is exceedingly more weighty and sorrowful. As a result of it all, there is no hope, there are no jobs, and there is no future.

Here’s the even more disturbing part: Mitt Romney had his hand in that pie.

And yet the saddest and most perplexing part is, that most Alabamians will vote for the GOP nominee/candidate.

Following the economic investigative report are historical local news reports that show the progression about the issue (which validate the economic investigative report by Greg Palast), from the:
Decatur Daily,
Huntsville Times,
• Associated Press,
• Athens-Limestone News Courier,
• Saginaw News (via MLive.com), and
• Wall Street Journal,
dating 2005, 2007, 2008, 2009 & 2010.

For the benefit of the reader, Greg Palast is an economist and financial investigator turned journalist whose series on vulture funds appeared on BBC Television’s Newsnight. He is the author of The Best Democracy Money Can Buy (Penguin) and, most recently, Billionaires & Ballot Bandits: How to Steal an Election in 9 Easy Steps (Seven Stories). For additional information about him, his website is: http://www.gregpalast.com.

Mitt Romney’s Bailout Bonanza

Greg Palast, October 17, 2012   |    This article appeared in the November 5, 2012 edition of The Nation.

This investigation was supported by the Investigative Fund at the Nation Institute and by the Puffin Foundation. Elements of it appear in Palast’s new book, Billionaires & Ballot Bandits: How to Steal an Election in 9 Easy Steps (Seven Stories). Research assistance by Zach D. Roberts, Ari Paul, Nader Atassi and Eric Wuestewald.

Mitt Romney

2012 GOP Presidential Nominee Mitt Romney (AP Photo/Evan Vucci)

Mitt Romney’s opposition to the auto bailout has haunted him on the campaign trail, especially in Rust Belt states like Ohio. There, in September, the Obama campaign launched television ads blasting Romney’s November 2008 New York Times op-ed, “Let Detroit Go Bankrupt.” But Romney has done a good job of concealing, until now, the fact that he and his wife, Ann, personally gained at least $15.3 million from the bailout—and a few of Romney’s most important Wall Street donors made more than $4 billion. Their gains, and the Romneys’, were astronomical—more than 3,000 percent on their investment.

It all starts with Delphi Automotive, a former General Motors subsidiary whose auto parts remain essential to GM’s production lines. No bailout of GM—or Chrysler, for that matter—could have been successful without saving Delphi. So, in addition to making massive loans to automakers in 2009, the federal government sent, directly or indirectly, more than $12.9 billion to Delphi—and to the hedge funds that had gained control over it.

One of the hedge funds profiting from that bailout—
$1.28 billion so far—is Elliott Management, directed by 
Paul Singer. According to TheWall Street Journal, Singer has given more to support GOP candidates—$2.3 million—than anyone else on Wall Street this election season. His personal giving is matched by that of his colleagues at Elliott; collectively, they have donated $3.4 million to help elect Republicans this season, while giving only $1,650 to Democrats. And Singer is influential with the GOP presidential candidate; he’s not only an informal adviser but, according to theJournal, his support was critical in helping push Representative Paul Ryan onto the ticket.

Singer, whom Fortune magazine calls a “passionate defender of the 1%,” has carved out a specialty investing in distressed firms and distressed nations, which he does by buying up their debt for pennies on the dollar and then demanding payment in full. This so-called “vulture investor” received $58 million on Peruvian debt that he snapped up for $11.4 million, and $90 million on Congolese debt that he bought for a mere $20 million. In the process, he’s built one of the largest private equity firms in the nation, and over decades he’s racked up an unusually high average return on investments of 14 percent.

Other GOP presidential hopefuls chased Singer’s endorsement, but Mitt chased Singer with his own checkbook, investing at least $1 million with Elliott through Ann Romney’s blind trust (it could be far more, but the Romneys have declined to disclose exactly how much). Along the way, Singer gained a reputation, according to Fortune, “for strong-arming his way to profit.” That is certainly what happened at Delphi.

* * *

Delphi, once the Delco unit of General Motors, was spun off into a separate company in 1999. Alone, Delphi foundered, declaring bankruptcy in 2005, after which vulture hedge funds, led by Silver Point Capital, began to buy up the company’s old debt. Later, as the nation’s financial crisis accelerated, Singer’s Elliott bought Delphi debt, as did John Paulson & Co. John Paulson, like Singer, is a $1 million donor to Romney. Also investing was Third Point, run by Daniel Loeb, who was once an Obama supporter but who this summer hosted a $25,000-a-plate fundraiser for Romney and personally donated about $500,000 to the GOP.

As Delphi was in bankruptcy, making few payments, the bonds were junk, considered toxic by the banks holding them. The hedge funds were able to pick up the securities for a song; most of Elliott’s purchases cost just 20 cents on the dollar of their face value.

By the end of June 2009, with the bailout negotiations in full swing, the hedge funds, under Singer’s lead, used their bonds to buy up a controlling interest in Delphi’s stock. According to SEC filings, they paid, on average, an equivalent of only 67 cents per share.

Just two years later, in November 2011, the Singer syndicate took Delphi public at $22 a share, turning an eye-popping profit of more than 3,000 percent. Singer’s fund investors scored a gain of $904 million, all courtesy of the US taxpayer. But that’s not all. In the year since Delphi began trading publicly, its stock has soared 45 percent. Loeb’s gains so far for Third Point: $390 million. The gains for Silver Point, headed by two Goldman Sachs alums: $894 million. John Paulson’s fund, which has already sold half its holdings, has a $2.6 billion gain. And Singer’s funds and partners, combining what they’ve sold and what they hold, have $1.29 billion in profits, about forty-four times their original investment.

Yet without taking billions in taxpayer bailout funds—and slashing worker pensions—the hedge funds’ investment in Delphi would not have been worth a single dollar, according to calculations by GM and the US Treasury.

Altogether, in direct and indirect payouts, the government padded these investors’ profits handsomely. The Treasury allowed GM to give Delphi at least $2.8 billion of funds from the Troubled Asset Relief Program (TARP) to keep Delphi in business. GM also forgave $2.5 billion in debt owed to it by Delphi, and $2 billion due from Singer and company upon Delphi’s exit from Chapter 11 bankruptcy. The money GM forgave was effectively owed to the Treasury, which had by then become the majority owner of GM as a result of the bailout. Then there was the big one: the government’s Pension Benefit Guaranty Corporation took over paying all of Delphi’s retiree pensions. The cost to the taxpayer: $5.6 billion. The bottom line: the hedge funds’ paydays were made possible by a generous donation of $12.9 billion from US taxpayers.

* * *

One of President Obama’s first acts in office, in February 2009, was to form the Auto Task Force with the goal of saving GM, Chrysler, their suppliers and, most important, auto industry jobs. Crucial to the plan was saving Delphi, which then employed more than 25,000 union workers.

Obama hired Steven Rattner, himself a millionaire hedge fund manager, to head the task force that would negotiate with the troubled firms and their creditors to avoid the collapse of the entire industry. In Rattner’s memoir of the affair, Overhaul, he describes a closed-door meeting held in March 2009 to resolve Delphi’s fate. He writes that Delphi, now in the possession of its hedge fund creditors, told the Treasury and GM to hand over $350 million immediately, “because if you don’t, we’ll shut you down.” His explanation was corroborated by Delphi’s chief financial officer, John Sheehan, who said in a sworn deposition in July 2009 that the hedge fund debt holders backed up their threat with “an analysis of the cost to GM if Delphi were unwilling or unable to provide supply to GM,” forcing a “shutdown.” It would take “years and tens of billions” for GM to replace Delphi’s parts. At that bleak moment, GM had neither. The automaker had left the inventory of its steering column and other key components in Delphi’s hands. If Delphi laid siege to GM’s parts supply, the bailout would fail and GM would have to be liquidated or sold off—as would another Delphi dependent, Chrysler.

Rattner could not believe that Delphi’s management—now effectively under the hedge funders’ control—would “want to be perceived as holding GM hostage at such a precarious economic moment.” OneWall Street Journal analyst suggested that Singer was treating Delphi “like a third world country.” Rattner likened the subsidies demanded by Delphi’s debt holders to “extortion demands by the Barbary pirates.”

Romney has slammed the bailout as a payoff to the auto workers union. But that certainly wasn’t true for the bailout of Delphi. Once the hedge funders, including Singer—a deep-pocketed right-wing donor and activist who serves as chair of the conservative, anti-union Manhattan Institute—took control of the firm, they rid Delphi of every single one of its 25,200 unionized workers.

Of the twenty-nine Delphi plants operating in the United States when the hedge funders began buying up control, only four remain, with not a single union production worker. Romney’s “job creators” did create jobs—in China, where Delphi now produces the parts used by GM and other major automakers here and abroad. Delphi is now incorporated overseas, leaving the company with 5,000 employees in the United States (versus almost 100,000 abroad).

Third Point’s Daniel Loeb, whose net worth of $1.3 billion owes much to his share in the Delphi windfall, told his fund’s backers this past July that Delphi remains an excellent investment because it has “virtually no North American unionized labor” and, thanks to US taxpayers, “significantly smaller pension liabilities than almost all of its peers.”

* * *

Another outcome may have been possible. In June 2009, the Treasury and GM announced a bailout deal they’d crafted over months with the cooperation of the United Auto Workers. GM would take back control of Delphi via a joint venture with Platinum Equity, a buyout firm led by billionaire Tom Gores, a self-described “Michigan man” who grew up in the shadow of Delphi’s Flint plant.

The final Platinum plan, according to Delphi’s official statement posted on Marketwire in June 2009, lists plants in fourteen locations slated for closing, which would have left several of Delphi’s plants still in business, still unionized—and still in the United States. Crucially, the deal would have returned key Delphi operations, including the production of steering columns, directly to GM.

The hedge funders stunned Delphi by refusing to accept the Platinum plan. Harshly criticizing it as a “sweetheart deal,” they demanded 45 cents on the dollar for the debt bonds they had bought on the cheap—more than double what the Treasury-brokered Platinum deal would pay.

Then the Singer-led debt holders swooped in. After the Platinum deal was announced, Elliott Management quietly tripled its holdings of Delphi bonds, purchased at just one-fifth of their face value. By joining forces with Silver Point, Paulson and Loeb, Singer now controlled Delphi’s fate.

Gores, Delphi and UAW officials declined to respond to queries about the deal on the record, but the sworn deposition by Delphi CFO Sheehan (confidential then, but later posted on Scribd.com) lets us in on the tense negotiations culminating in a twenty-hour showdown between Delphi, GM, the UAW, the Auto Task Force and the US pension agency, on the one hand, and Singer’s hedge fund group, on the other. Delphi said it would dump the Platinum deal if the hedge funds would agree to terms that would take care of all stakeholders, including the following stipulation: “Agree on plan structure to maximize job preservation.”

The hedge funders said no, since they had a billion-dollar ace up their sleeve. According to Sheehan, Singer and company’s controlling interest allowed them to force the bankruptcy judge to hold an auction for all of Delphi’s stock. The debt holders outbid the Michigan Man’s team, offering $3.5 billion. But it wasn’t $3.5 billion in cash: under the rules of Chapter 11 bankruptcy, debtors-in-possession may bid the face value of their bonds rather than their current market value, which at the time was significantly lower. Under the Platinum deal, Delphi would have had much more in real money for operations: $250 million in cash from Gores, another $250 million in credit, and $3.1 billion in “exit financing” from GM, all of it backed up by TARP. Still, under Chapter 11 rules, the Platinum bid was technically lower. And that’s how Singer’s funds—which included the Romneys’ investment—came to buy Delphi for the equivalent of only 67 cents a share.

Rattner and GM, embarrassingly outmaneuvered, tried to put a good face on it. As Rattner wrote in his memoir, “In truth we didn’t care who got Delphi as long as GM could extricate itself from the continual drain on its finances and assure itself of a reliable supply of parts.”

* * *

Even before the hedge funds won their bid for Delphi’s stock, they were already squeezing the parts supplier and its workforce. In February 2009, Delphi, claiming a cash shortage, unilaterally terminated health insurance for its nonunion pensioners. But according to Rattner, the Treasury’s Task Force uncovered foggy accounting hiding the fact that the debt holders had deliberately withheld millions of dollars in cash sitting in Delphi accounts. Even after this discovery, the creditors still refused to release the funds.

The savings to the hedge fund billionaires of dropping retiree insurance was peanuts—$70 million a year—compared with the profits they later extracted from Delphi. But the harm to Delphi retirees was severe. Bruce Naylor of Kokomo, Indiana, had been forced into retirement at the age of 54 in 2006, when Delphi began to move its plants overseas. Naylor’s promised pension was slashed 40 percent, and his health insurance and life insurance were canceled. Though he had thirty-six years of experience under his belt as an engineer with GM and Delphi, he couldn’t find another job as an engineer—and he doesn’t know a single former co-worker who has found new employment in his or her field, either. Naylor ended up getting work at a local grocery store. That job gone, he now sells cars online for commission, bringing in one-fifth of what he earned before he was laid off from Delphi.

Even with his wife Judy’s income as a nurse, it hasn’t been enough: the Naylors just declared bankruptcy, and their home is in foreclosure.

After the hedge fund takeover of Delphi, the squeeze on workers intensified through attacks on their pensions. During its years of economic trouble, Delphi had been chronically shorting payments to its pension funds—and by July 2009, they were underfunded by $7 billion. That month, Singer’s hedge fund group won the bid for control of Delphi’s stock and made clear they would neither make up the shortfall nor pay any more US worker pensions. Checkmated by the hedge funders, the government’s Pension Benefit Guaranty Corporation agreed to take over Delphi’s pension payments. The PBGC would eat the shortfall.

With Delphi’s new owners relieved of its healthcare and pension obligations, its debts to GM and its union contracts—
and now loaded with subsidies from GM funded by TARP—the company’s market value rose from zero to approximately 
$10.5 billion today.

* * *

But there was still a bit of unfinished business: President Obama needed to be blamed for the pension disaster. In a television ad airing in swing states since September, one retired Delphi manager says, “The Obama administration decided to terminate my pension, and I took a 40 percent reduction in my pension.”

Another retiree, Mary Miller, says, “I really struggle to pay for the basics…. I would ask President Obama why I had no rights, and he had all the rights to take my pension away—and never ever look back and say, ‘Not only did I take it from Mary Miller, I took it from 20,000 other people.’”

These people are real. But it’s clear that these former workers, now struggling to scrape by, were hardly in the position to put together $7 million in ad buys to publicize their plight. The ads were paid for by Let Freedom Ring, a 501(c)(4) nonprofit advocacy organization partially funded by Jack Templeton Jr., a billionaire evangelical whose foundation has sponsored lectures at the Manhattan Institute (the anti-union think tank whose board of directors includes not only Singer but Loeb). The ads also conveniently leave out the fact that the law sets specific ceilings on what the PBGC is allowed to pay retirees—regardless of what they were originally owed.

In June 2011, Charles and David Koch hosted a group of multimillionaires at a retreat in Vail, Colorado. In secret recordings obtained by investigator Brad Friedman, the host, Charles Koch, thanks Singer and Templeton, among others, for each donating more than $1 million to the Koch brothers’ 2012 anti-Obama election war chest.

Of course, it wasn’t Obama who refused to pay the Delphi pensions; it was Paul Singer and the other hedge funds controlling Delphi. The salaried workers’ pensions were, after all, an obligation of Delphi’s owners, not the government. Delphi’s stockholders—the Romneys included—had one easy way to rectify the harm to these pensioners, much as GM did for its workers: just pay up.

Making good on the full pensions for salaried workers would cost Delphi a one-time charge of less than $1 billion. This year, Delphi was flush with $1.4 billion in cash—
meaning its owners could have made the pensioners whole 
and still cleared a profit. Instead, in May, Delphi chose to use most of those funds to take over auto parts plants in Asia at 
a cost of $972 million—purchased from Bain Capital.

* * *

That leaves one final question: Exactly how much did the Romneys make off the auto bailout? Queries to the campaign and the Romneys’ trustee have gone unanswered. And Romney has yet to disclose the crucial year of his tax returns, 2009. But whatever the tally, it was one sweet deal. The Romneys were invested with Elliott Management by the end of 2010, before Delphi was publicly traded. So, in effect, they got Delphi stock at Singer’s initial dirt-cheap price. When Delphi’s owners took the company public in November 2011, the Romneys were in—and they hit the jackpot.

In their 2011 and 2012 Federal Financial Disclosure filing, Ann Romney’s trust lists “more than $1 million” invested with Elliott. This is the description for all of her big investments—the minimal disclosure required by law. (Had Romney kept the holding in his own name, he would have had to reveal if his investment with Singer had made more than $50 million.)

It is reasonable to assume that Singer treated the Romneys the same as his other investors, with a third of their portfolio invested in Delphi by the time of the 2011 initial public offering. This means that with an investment of at least $1 million, their smallest possible gain when Delphi went public would have been $10.2 million, plus another $10.2 million for each million handed to Singer—all gains made possible by the auto bailout.

But that’s just the beginning. Since the November 2011 IPO, Delphi’s stock has roared upward, boosting the Romneys’ Delphi windfall from $10.2 million to $15.3 million for each million they invested with Singer.

But what if the Romneys invested a bit more with Singer: let’s say a mere 3 percent of their reported net worth, or 
$7.5 million? (After all, ABC News reported—and Romney didn’t deny—that he invested “a huge chunk of his vast wealth” with Singer.) Then their take from the auto bailout so far would reach a stunning $115 million.

The Romneys’ exact gain, however, remains nearly 
invisible—and untaxed—because Singer cashed out only a fragment of the windfall in 2011. And the Singer-led hedge funds have been able to keep almost all of Delphi’s profits untaxed 
by moving Delphi’s incorporation from Troy, Michigan, to the Isle of Jersey, a tax haven off the coast of France.

The Romneys might insist that the funds were given to Singer, Mitt’s key donor, only through Ann’s blind trust. But as Mitt Romney said some years ago of Ted Kennedy, “The blind trust is an age-old ruse, if you will. Which is to say, you can always tell a blind trust what it can and cannot do.” Romney, who reminds us often that he was CEO of a hedge fund, can certainly read Elliott Management’s SEC statements, and he knows Ann’s trust is invested heavily in a fund whose No. 1 stake is with Delphi.

Nevertheless, even if the Romneys were blind to their initial investment in Elliott, they would have known by the beginning of 2010 that they had a massive position in Delphi and would make a fortune from the bailout and TARP funds. Delphi is not a minor investment for Singer; it is his main holding. To invest in Elliott is essentially a “Delphi play”: that is, investing with Singer means buying a piece of the auto bailout.

Mitt Romney may indeed have wanted to let Detroit die. But if the auto industry was going to be bailed out after all, the Romneys apparently couldn’t resist getting in on a piece of 
the action.

In last week’s issue, Lee Fang revealed how Mitt Romney’s son Tagg and investors in his firm Solamere Capital can cash in if his father wins.

Greg Palast October 17, 2012   |    This article appeared in the November 5, 2012 edition of The Nation.

http://www.thenation.com/article/170644/mitt-romneys-bailout-bonanza#

Delphi workers protest

Union criticizes CEO’s compensation plan; company postpones wage cuts

WEDNESDAY, NOVEMBER 30, 2005
By Holly Hollman
DAILY Staff Writer

hhollman@decaturdaily.com (256) 340-2445

TANNER — About 100 people took vacation Tuesday, sat in lawn chairs on U.S. 31 around barrels where wood burned to keep them warm, and tried to raise awareness about a wreck.

That wreck is not a collision with multiple fatalities. The wreck, according to their picket signs, is Delphi Chief Executive Officer Steve Miller.

“Miller Wrecks American Values,” the signs said.

United Auto Workers Local 2195 in Tanner was among 23 Delphi unions nationwide to hold an informal picket to protest Miller’s plans for the company.

Delphi workers protest

Ray Gold, of Athens, holds his picket sign reading “Delphi cooks the books Worker get BURNED!” while standing next to his fire on a cold, windy day outside the Delphi plant. Behind him (I don’t have man in middle’s name …just realized…but one on left is Matthew Green, Jr.) other Delphi employees join in the informational picket. Photo by Emily Saunders 11/29/05

Howard Greene, shop chairman at the Limestone plant and a UAW member, said Miller is assaulting the middle class.

“Delphi’s hurting the people who helped build this company and taking care of the top guys,” Greene said during a break from picketing.

Delphi, the largest U.S. auto supplier, filed for Chapter 11 bankruptcy protection Oct. 8, citing high labor costs. Since then, foreign companies such as the India-based Sona Group have expressed interest in buying Delphi’s steering systems operations, which employ about 2,100 locally.

Delphi will have a hearing in bankruptcy court in January on its compensation plan. The plan would cut wages of production workers from $27 an hour to $10 to $12.50 an hour.

What has upset the union, Greene said, is that the plan would also give stock options and cash bonuses to about 600 executives when Delphi emerges from bankruptcy. Delphi also wants to extend severance packages from 12 to 18 months for some key executives.

Delphi has defended this part of the plan by saying it is necessary to keep its executive team in place during the bankruptcy process.

“The company didn’t go bankrupt due to its hourly and salary workers,” said Greene, a Delphi employee for 26 years. “Yet they want to give bonuses to people who were running it when it went bankrupt and cut the workers’ pay.”

Miller cut his own salary from $1.5 million a year to $1 million a year. Greene said Miller, however, did keep his $3 million signing bonus for joining Delphi.

Miller told The Detroit Free Press on Monday that Delphi will allow more time for negotiations with unions before asking a bankruptcy court to throw out its union contracts. Delphi was to file that motion Dec. 16, but agreed to wait until Jan. 20. Miller told the Detroit paper that he agreed to the delay after meeting privately last week with GM CEO Rick Wagoner because it would be in the “best interest of all three parties.”

GM, which would be hurt by a Delphi workers strike, provided Delphi short-term financial support by not insisting on price cuts for Delphi-supplied parts in 2006.

Although still battling with unions on wage cuts, Miller told employees in a voice mail message that the pickets could take place, the Associated Press reported. Miller’s message was on a union Web site in Indiana, and a Delphi official confirmed the message.

“Our unions have the right to share their point of view with their membership, and while we certainly disagree on some major points, we understand that these are to be for information only, and we don’t expect any disruptions to our operations,” Miller said in the message.

Greene said Tuesday would be the only day of picketing. Local UAW members waved their signs from 5:30 a.m. to 5 p.m.

“We hope this sends a message to our local, state and federal representatives that we need some help.”

Greene named three improvements the federal government can make to prevent the loss of American automotive companies like Delphi.

First, trade rules hinder American workers, he said.

“We don’t need free trade,” Greene said. “We need fair trade. Right now, we can’t compete with foreign workers who make 90 cents to a couple of dollars an hour. We import far more than we export because of that.”

Secondly, Greene said, bankruptcy and pension laws need revamping.

“You shouldn’t be able to declare bankruptcy and then eliminate pensions,” he said. “If workers have been guaranteed a pension, a company should have to keep that funded. If you work your 30 years or until you are 62 with the promise of a pension, it should be there.”

Lastly, health care is too expensive, Greene said.

“Why are prescription drugs cheaper in Canada?” he asked. “Our high medical costs are a burden on corporations like Delphi who provide health-care coverage, and on individuals who have to provide it for themselves.”

Greene said the UAW wants the government to realize that because of those three issues, middle-class workers like those at Delphi are suffering.

“The middle class supports the tax base for the rich and poor,” Greene said. “We have middle-class workers in the military serving in Iraq right now who are protecting this country, but could come home to a lower paying job or no job at all.”

Greene said locally, Delphi contributes $200 million in wages to the economy. With threats of a foreign buyer, a possible strike, loss of pensions, 24,000 job cuts and lowered wages, workers like Greene are scaling back on spending.

“I personally don’t eat out much at all anymore,” he said. “I know of people who are cutting back like that. What happens to the North Alabama economy when we stop eating out? When we stop buying new cars? When we cut back on Christmas shopping?”

Greene said textile jobs went overseas first, then steel mills. The automotive industry is next.

“There’s been a lot of press that we’re worried about cut wages,” Greene said. “And it is hard to put your kids through college on $10 an hour. But what we’re most concerned about is having a job at all. If America loses its middle class, like our workers here, what shape will our country be in then?”

http://archive.decaturdaily.com/decaturdaily/news/051130/delphi.shtml

Delphi plant sale nearer

California investment group is favored bidder in contest for bankrupt steering division, Limestone facility
THURSDAY, FEBRUARY 1, 2007
By Eric Fleischauer,
eric@decaturdaily.com (256) 340-2435

If all goes as expected, Limestone County’s 1,300 Delphi employees will soon work for a Beverly Hills, Calif.-based investment group.

Platinum Equity LLC is Delphi’s favored bidder in a contest over bankrupt Delphi Co.’s steering and halfshaft division, which includes the Limestone County facility that until recently employed more than 2,000.

United Auto Workers Local 2195 President Terry Scruggs, who recently retired from Delphi pursuant to a buyout package that lured hundreds, said he was thrilled to hear of Platinum’s interest.

“If you look at what’s going on at Delphi, you’ve got two scenarios,” Scruggs said.

“They sell you, or they close you. I’d rather them sell us than close us. It’s not a pretty situation.”

According to Platinum Senior Vice President Mark Barnhill, negotiations with Delphi over its bid are not finalized.

But if they are successful, he said, Delphi will ask the bankruptcy court to recognize Platinum as the lead bidder, or “stalking horse.”

As stalking horse, Platinum is still vulnerable to competing bids. If the bankruptcy court chooses another suitor, however, Platinum has a right to compensation for expenses related to its bid.

Barnhill would not reveal the amount of the bid. An industry publication placed it at $560 million.

He said he could not predict when Delphi would seek court approval, assuming negotiations are successful. He also had no comment on how the acquisition would affect local employees.

“It’s too early in the process to talk about the operations plan for the business. That will evolve over time after the transaction is completed, in consultation with the management team, the UAW and a variety of other stakeholders,” Barnhill said. “Now we’re just working through the acquisition.”

Platinum has acquired more than 65 businesses since it was founded in 1995, but not many are in the automotive sector.

“We really are not so much sector-focused as we are business characteristics-focused,” Barnhill said. “We think that if certain characteristics are present in a business, we can create value. We have a pretty strong track record of moving into new markets, establishing a platform company and then succeeding.”

Platinum said it would retain Delphi Steering President Robert J. Remenar if the court accepts its bid.

Barnhill said he did not expect significant opposition from other bidders once its stalking-horse status is established in bankruptcy court.

“This is an acquisition opportunity that is pretty well known out there,” Barnhill said. “It would be hard for me to foresee a major new player in this.”

In March, Delphi submitted a restructuring plan to the bankruptcy court that called for closing or selling of 21 of its 29 U.S. plants, including the one in Limestone County. Delphi, which spun off from General Motors in 1999, filed for bankruptcy in October 2005.

The Limestone County plant is part of a Delphi steering division that employs 10,000 in 22 plants worldwide, according to Delphi spokesperson Cheryl Kilborn.

Half of those employees are in two U.S. facilities, Limestone County’s and a larger one in Saginaw, Mich. The rest are outside the United States.

Foreign plants

While the bankruptcy solely includes U.S. operations, the sale would include steering-division plants in Europe, South America, Mexico, India, China, Japan and South Korea.

Before Delphi declared bankruptcy, it had moved the Limestone facility into a corporate division separate from the steering division because of its financial problems.

Once it decided the steering division was on the selling block, it moved the plant back to that division. The Limestone County plant is included in the Platinum bid.

According to reports, Platinum’s main competition for its lead position was Cerberus Capital Management. Cerberus was one of three groups that proposed investing billions in Delphi, which means it would have a substantial ownership position in the company when it exits bankruptcy.

Labor agreements

The investment proposal was conditioned, however, on Delphi reaching labor agreements with UAW and supply agreements with General Motors by Wednesday. Under the terms of the proposal, in the absence of those agreements, Delphi, Cerberus and the other investors can withdraw from the deal.

The steering business booked $3.3 billion in revenue in 2005. In 2006, it contracted $3.4 billion in new business.

“This is the company we feel is in the lead in the bidding process,” said Delphi’s Kilborn. “This is who we think will bring the most value to the (bankruptcy) estate.”

If the court approves Platinum as the stalking horse, it will make public the terms of its bid and open the steering division up for bids from other companies.

http://archive.decaturdaily.com/decaturdaily/news/070201/delphi.shtml

Delphi’s Alabama workers expect plant to close in 2009

Published: Sunday, June 24, 2007, 1:15 PM     Updated: Sunday, June 24, 2007, 1:17 PM

By The Associated Press

ATHENS — Some 1,100 workers at auto parts maker Delphi’s plant in north Alabama meet Monday with union officials who are expected to announce that the plant will close in 2009, The Decatur Daily reported Sunday.

A delegation from the United Auto Workers will meet the workers, UAW Local 2195 President Vaughn Goodwin and others said.

“We’ll be holding meetings all day Monday to let people know the fate of the plant and the fate of their jobs,” said Goodwin. “I can’t say more than that.”

On Friday, Delphi Corp., based in Troy, Mich., announced it had reached a memorandum of understanding with UAW that would cut wages from about $27 an hour to a maximum of $18.50 an hour by Oct. 1.

The Alabama plant, which employed more than 2,000 before Delphi declared bankruptcy Oct. 8, 2005, has lost more than half its workers to buyouts designed to cut Delphi labor costs.

Since the buyouts took effect, Delphi has hired additional workers, at lower wages, under a two-tiered plan negotiated with UAW.

Longtime workers who did not participate in the buyout continue to receive wages approaching $30 per hour, but post-bankruptcy employees receive about half that amount.

In a bankruptcy filing last year, Delphi said it would close the Limestone County plant in January 2008 if it had no buyers. It left open the possibility of government incentives changing that plan.

Reports on the memorandum of understanding between UAW and Delphi were limited to wage cuts and buyout offers. Asked if the tentative agreement also contemplated plant closings, Goodwin said, “I can’t comment specifically, but you’re on the right track.”

Athens Mayor Dan Williams said he’s heard rumors the plant would close in 2009.

“Delphi’s closing would be a sad day for the area, no question,” Williams said. But Williams and others have been trying for years to attract a buyer for one of Delphi’s three buildings.

Williams said it would be easier to market the entire plant than one building.
“We’re very concerned about Delphi,” Williams said. “I can’t stand to think about them closing.”

Alabama gave incentives to Delphi in 2002 that included the purchase of still-vacant Plant 22 and 121 acres for a price as high as $15 million, $2.2 million over the appraised value of the 700,000-square-foot plant.

http://blog.al.com/breaking/2007/06/delphis_alabama_workers_expect.html

Delphi workers’ final day

Limestone factory will close today after almost 35 years

June 25, 2009

By Karen Middleton

Delphi workers' final day

Last day at Delphi, Athens-Limestone News Courier/ Photo by Kim Rynders

Today, the remaining 100 hourly production workers still at the Delphi Saginaw Steering Systems plants in South Limestone County will leave the site for the final time.

Earlier this month, UAW President Vaughn Goodwin confirmed that today would be the last day of production.

Delphi—then known as Saginaw Steering Gear—began production here nearly 35 years ago. The company filed for bankruptcy Oct. 8, 2005.

On June 1, Delphi unveiled a new plan to emerge from its nearly four-year-old Chapter 11. The deal calls for Delphi to sell to four U.S. auto-parts plants and its steering business to former parent GM. Most of Delphi’s remaining assets would be sold to Platinum Equity, a Beverly Hills, Calif., private-equity firm in a transaction largely backed by GM.

Human Resources Manager Harry Fuller said Thursday that some salaried workers would remain on site throughout most of the summer.

“We will retain salaried workers, who will remain sometime longer,” said Fuller. “We will have 55 or so salaried workers onsite, primarily in all functions.

Fuller said that after today there would be about 60 employees onsite, who would leave at staggered times over the next two to three months as the machines are decommissioned and the plants cleaned.

Fuller said that Plant 21 would close completely by September and Plant 23 would close by October.

The state purchased Plant 22 in 2001 as part of an incentive package. The new Robotics Park will soon be built on grounds in front of Plant 22.

http://enewscourier.com/local/x1037431792/Delphi-workers-final-day

Big plans for former Delphi/Saginaw Steering Gear

Published: Thursday, June 05, 2008, 3:50 PM     Updated: Thursday, June 05, 2008, 3:55 PM

The new name remains under wraps. However, the new owners of the steering business formerly known as Delphi aren’t keeping secret their intentions.

”Today we are positioned to last for another 100 years,” James Ray, director of halfshaft business at the Buena Vista Township-based global business, told Saginaw Valley business leaders this morning.

Throughout his discussion of the innovative, more-than-a-century-old company that many still call Saginaw Steering Gear, Ray referred to what until recently was the county’s largest employer as simply ”Steering.”

Platinum Equity, a private Los Angeles-based equity firm, is preparing to launch the company as soon as it resolves some complicated information technology transitions this summer.

Troy-based Delphi Corp. received bankruptcy court approval for the sale of the steering business this year.

Platinum is to assume $190 million in liabilities, and General Motors Corp. would pay Delphi $257 million — making the acquisition a $447 million deal.

When the transition is complete, Buena Vista will house headquarters of a stand-alone company with a worldwide reach that does more than $2.5 billion in business, said Ray, whose Delphi career began in 1983 as a cooperative education student. After working in several positions throughout the company, including a two-year stint as chief engineer of steering gears, he took his present position in 2001.

”The outlook for Steering is positive but will be challenging,” Ray said. ”Our world headquarters will remain here. And we will add a southeastern Michigan customer center in Auburn Hills.”

Steering has 18 manufacturing plants, 16 customer support centers and six regional engineering centers in the United States, Mexico, Brazil, Italy, France, Germany, Poland, India, Australia, China, Korea and Japan. North America brings in the largest share of revenue, but Europe and Asia-Pacific are growing fast.

The steering parts company has diversified its traditional product line beyond those that make trucks and cars work. Its customers, for example, include snowmobile makers Polaris, Arctic Cat and John Deere.

To remain successful, it’s imperative that managers and employees work together, Ray said.

United Auto Workers members at the Buena Vista site in April rejected a four-year contract that addressed local work rules. Three weeks later, after union leaders spent more time explaining the pact to rank-and-file members, workers approved the pact.

Ray credits workers for realizing that the company’s operations have to become more efficient, effective and competitive.

”In Steering’s case, we will have a new owner and investor to help us with restructuring, refocusing and reinvesting in the stand-alone business,” Ray said.

Platinum has worked with managers at the plant for 18 months. Robert J. Remenar, who has served as president of Delphi Steering since 2002, will stay on as president and chief executive officer.

Locally, the plant employs about 3,700 men and women: about 2,600 hourly employees, 1,000 engineers and the rest contract and support staff. Globally, the company employs about 9,000.

The Athens, Ala., Steering site will close in late 2009, sending 300 jobs — primarily general operator and skilled trades positions — to Buena Vista.

One of the company’s main products, halfshafts have joints that allow a vehicle’s wheels to turn as well as move up and down while smoothly transferring engine power to the wheels.

Consolidation of the halfshaft and driveline business from Athens also brought additional machinery and equipment to Saginaw.

”We have better utilization of assets here,” Ray said.

Whether the site eventually will need more workers depends on the market.

”The market in the U.S. is so uncertain now,” Ray said. ”Just six months ago, industry analysts were saying 17 million to 17.3 million vehicles would sell in 2008. Now they’re saying 14 million. That’s a substantial difference.”

Even as outside economic forces — increases in the cost of steel and fuel, as examples — impact the company, the steering business is on solid footing, Ray said.

”The new owners see this as an opportunity. It wasn’t just one company; we had a variety of companies that were interested in buying the business,” Ray said.

”The major point is that we have a portfolio of products that are well-positioned. We’re very global, located in all major vehicle markets in the world.”

Restructuring and refocusing the company — soon no longer part of a larger corporation that produced a myriad of products — to compete in those markets is key, Ray said.

”It’s more important that we set the right strategies and set the right initiatives for (our) market,” he said.

As yearly business bookings continue to grow — Steering booked more than $4 billion in business last year — ”we see ourselves as a very strong player in the business,” he said.

http://www.mlive.com/businessreview/tricities/index.ssf/2008/06/big_plans_for_former_delphisag.html

Buyers aren’t rushing to buy former Delphi plant building

Published: Sunday, November 28, 2010, 7:30 AM
By Keith Clines, The Huntsville Times

HUNTSVILLE, AL. – There’s plenty of room for a buyer to set up the interior any way he chooses for the ultimate fixer-upper at 6275 U.S. 31, Tanner, Ala.

The 16-acre, air-conditioned building built in 1978 that once housed Plant 22 of Delphi is empty from wall to wall.

That’s 691,000 square feet of floor space and 47-foot high ceilings to fill.

There is no “For Sale by Owner” sign out front. The price is negotiable.

You won’t have to buy either of the similar buildings (Plants 21 and 23) flanking the building, but you will have to separate the power, water, sewer and steam lines that are interconnected among the three buildings.

delphi-building-7514a0e4b17bf628

The former Delphi Plant #22, in Tanner, Alabama (in Limestone county, near Decatur) is now owned by the State of Alabama. Unfortunately, however, it’s a 691,000 square foot “white elephant.” Photo Courtesy of Limestone County Economic Development Association

“There are some issues there, but they’re not overwhelming,” said Tom Hill, president of the Limestone County Economic Development Association, who is marketing the building for the owner.

General Motors, which built the three plants in the 1970s, extended the power, natural gas, water and steam lines from the original building to the other two buildings as they were built. “They’re somewhat interconnected,” Hill said.

Hill likened it to house additions in which the utilities are extended from the house to the additions.

The estimated cost to disconnect them is $1.5 million, but Hill made it sound simple, too. “You could slap some meters on the lines and separate them,” he said.

The money to do that could be included in any incentive package that the state and local governments might put on the table for a potential buyer.

The owner happens to be the state of Alabama.

Gov. Don Siegelman in 2002 had the state buy Plant 22 and 127 acres for $10.8 million in an effort to save the Delphi plant from going to Mexico. The building’s appraised value then was $10.8 million and the land was valued at about $2 million.

“We’ll put a ‘for sale’ sign up and try to turn that building and property into money,” Siegelman said when it was bought.

But that hasn’t happened.

Hill said he would prefer not to publicly announce the asking price for the building except to say it’s “negotiable.” He did note, however, that Delphi is offering the other two buildings for $8.5 million total.

Delphi got all of the equipment in Plants 21 and 23 removed in January and finished an environmental cleaning of the plants this summer, Hill said.

That allowed all three buildings to be marketed simultaneously, he said.

He said a couple of potential buyers have looked at the plants, but nothing came to fruition.

“We’re dealing with a national recession that came along,” Hill said. “It’s been a slow period in economic development the last year-and-a-half.”

Hill said the state prefers to let him market the plant locally because local economic development officials have more experience marketing “spec” buildings that the state does.

But, he said, project managers with the Alabama Development Office are aware of the plant’s availability.

A year after the state bought the plant, Drayton Nabors, the state finance director under Gov. Bob Riley, said the state’s purchase of the building and property “was a senseless thing to do” and that he didn’t know of any commercial, private or public use for the “enormous facility.”

Nabors and other state officials said in 2003 that it had been rejected by Calhoun Community College and that terms of the deal prohibited it from being used as a state prison or mental health center, or from being sold for use as a food, rubber or paper processing plant.

State Sen. Tom Butler, D-Madison, at one time said the building could be used as a film sound stage.

The state did deed 53 acres in front of the plant to Calhoun College for the Alabama Robotics Technology Park.

Riley in June told Times editors and reporters that the vacant plant was being considered for a potential economic development prospect.

Delphi, which GM spun off in 1999 as its parts division, filed for bankruptcy in 2005 and emerged from bankruptcy in 2009.

The plant, which opened in 1975 as General Motors’ Saginaw Steering Gear Division and employed more than 4,000 workers at its peak in the mid 1980s, closed in June 2009.

http://blog.al.com/breaking/2010/11/post_481.html

6/28/09
Editorial

Delphi closing could also be a beginning

From that day in 1974, when General Motors broke ground in Limestone County for its first Saginaw building, to Friday, when the last of the three plants closed, the history read like a soap opera.

Yet, for workers like Harold Wales of Athens, who worked there 26 years, Saginaw brought a lifestyle of which they had only dreamed.

“We all bought nicer homes than we had ever expected. We had money to educate our children. It was a better job than most of us had ever hoped for,” he recalled on the eve of the plant’s closing Friday.

Saginaw Steering Gear Division, later to become part of GM’s Delphi Automotive Systems, brought prosperity to the Valley and helped reshape who we are.

People accustomed to making little more than minimum wage hired on at Saginaw and began bringing home annual salaries in excess of $50,000. Some workers told of working extra shifts and pocketing $100,000.

The automobile industry is a cyclical business and employment fluctuated over the decades, yet workers stayed because they always hoped work would bounce back. It did, but gradually the energy left Saginaw/Delphi and employment dropped from a high of 4,200 in 1986 to 135 when the doors closed Friday, and so did wages.

The soap-opera ends as most people thought it would. It leaves a sense of relief and sadness, yet with hope that the mammoth buildings may live again some day in some other manufacturing capacity.

The buildings — across U.S. 31 from Calhoun Community College and behind its robotics center that is under construction — should appeal to the people who make robots.

http://www.decaturdaily.com/stories/Delphi-closing-could-also-be-a-beginning,37740?print=1

THE GAME

A GM Unit in China’s Hands

November 8, 2010
By DENNIS K. BERMAN

A GM Unit in China's Hands_20101108175554

Tempo’s Zhou Tianbao, Pacific Century Motors’ Zhao Guangyi and GM’s Scott Mackie in Detroit in July when GM’s Nexteer was sold. GM/European Pressphoto Agency

You don’t need to understand exchange rates and trade wars to grasp the economic change that has come to Saginaw, Mich. Remarkably, the largest private employer there will soon be the city government of Beijing.

In the weeks ahead, a 104-year-old unit of General Motors will be sold to new owners from China. The unit made steering equipment for decades under the name Saginaw Steering Gear. Now known as Nexteer, it employs 8,300 people around the world. Its new Beijing owners call themselves Pacific Century Motors.

You and the rest of the world probably missed this $450 million deal. General Motors, still controlled by the U.S. government, gave it little attention this summer as it readied its own high-profile return to the stock market.

But it is one of the landmark deals of the era, the first time Chinese investors have bought a U.S. industrial operation of such scale and history: Twenty-two factories around the globe, six engineering centers, 14 customer-support centers. All of it will be run from Saginaw, where devotion to the company extended to a now-defunct hockey team. It called itself the Gears.

The deal will, of course, test China’s nascent foreign investment and management prowess. But it is shaping up to be more of a test stateside, where attitudes against China continue to coarsen as unemployment stays stubbornly high and politicians complain about China taking U.S. jobs, if not U.S. pride.

During World War II, Saginaw Steering Gear manufactured M1 carbines used by Marines in the Pacific.

“Did it really need to be sold to the Chinese?” asks Roger Kahn, a Michigan state senator from Saginaw. “I want to see businesses successful in the U.S. owned in the U.S. This doesn’t meet the standard.”

The WSJ’s Dennis Berman tells Evan Newmark a takeover of a car-steering plant in Saginaw, Michigan by the Beijing city government is a sign of things to come as cash-rich China looks to invest in the U.S. auto sector.

Ironically, at the G-20 conference in Seoul this week, U.S. leaders are trying to cajole China to buy more from the U.S., to help right a trade deficit that hit $28 billion in August alone. Such imbalances, they say, helped feed the credit craze that culminated in the 2008 financial crisis.

All of these things are conveniently abstract at G-20 meetings. In Saginaw, they are experiencing first hand the collision of two economies in motion, of Chinese ambition and American pride.

People inside and outside the company seem gingerly accepting of Pacific Century, a venture of the city of Beijing’s investment arm and a closely held Beijing auto parts company called Tempo Group.

Nexteer was in bad straits in recent years. It has been starved for capital. Its customers—other car companies—preferred it to be independent and not a part of GM.

Once Nexteer hit the auction block, the Chinese investors proved surprisingly thorough, even though some of them didn’t speak English, said a person familiar with the transaction. They funded their deal with all cash, using no debt. And the opportunity for Nexteer to penetrate the Chinese auto market, soon to be the world’s largest, was a major selling point for GM, this person said.

The Chinese buyers beat out Korean and U.S. private-equity contenders. The two sides announced their deal at a small July news conference in Saginaw. U.S. and Chinese flags flanked the dais.

“I’m sure there are a lot of people who are not happy they’re Chinese-owned,” says Scott Somers, who runs Mid-States Bolt & Screw just down the road from Nexteer, which is a customer. “But at this point it seems to be a positive thing. Lots of businesses are involved with that complex and depend on it for their livelihood.”

The feeling is more begrudging for the workers inside the company. One, who called the Chinese “commies,” complained to a union official that the U.S. flag and a P.O.W.-M.I.A. memorial flag were taken down when Chinese officials visited recently. A company spokesman said he had no knowledge of any flags being taken down.

And while they like the stability of new owners, “everyone is concerned about long-term viability,” said one United Auto Workers official who asked not to be named. The union recently took a pay cut ahead of the transaction. “We don’t know whether the intention is to buy the book of business and move to China or stay here. We do not feel comfortable.”

One can sympathize with the union’s worries of a Trojan horse. Auto parts have remained a key U.S. export. And Nexteer’s new owners are eager to buy the company because of its more than 1,000 patents, says Jack Chen, an investment banker at Los Angeles’s Transworld Capital Group who helped arrange the deal. “This dramatically shortens the technology gap between China and the rest of the world,” he said in an interview.

It is hard to know just how the technology will make its way back to China in the years ahead. Nor whether that will hurt or help the people who work in Michigan or those served by the Beijing city government.

Meantime, Saginaw must strike a most practical of arrangements. Chinese capital and access to its home markets is once again giving the city some optimism after unemployment spiked to 14% early this year. The company is adding 100 engineering jobs this year. It is expected to increase its United Way contribution after having to reduce its gifts in recent years.

More broadly, direct Chinese investment on U.S. shores may help improve the countries’ fraught trade relationship, in the same way that a wave of Japanese auto plants did here in the 1980s and 1990s.

More investment may also give the U.S. leverage to encourage China to open up its borders to U.S. firms, which are frequently hamstrung by onerous investment rules.

The U.S. was built on foreign investment for centuries, reminds Dewey & LeBoeuf attorney Alan Wolff, a former U.S. trade negotiator. “And we should bolster any investment that encourages U.S. manufacturing, including from China. We’d rather build it here than there.”

And so it begins. The Pacific Century.

First stop, Saginaw.

Write to Dennis K. Berman at dennis.berman@wsj.com or Twitter.com/dkberman

http://online.wsj.com/article/SB10001424052748703957804575602943255219552.html

9 Responses to “The Oracle at Delphi: Mitt Romney’s direct tie to increased unemployment in North Alabama”

  1. m. t. delbeck said

    It’ sad. It’s stupid. It’s a lot of things. However, It isn’t perplexing.

    • Warm Southern Breeze said

      Thanks for reading, and most importantly, for sharing your thoughts. Yes, I agree wholeheartedly. When a person loves someone, they will do anything to get more of the object of their affection. And when a human loves a thing, rather than a living, breathing human being, that one will hurt others to get more of the object of their affection… money. That’s what greed is – the love of money. And the really terrible thing about loving money, beside the fact that it can’t love you back, is that it depersonalizes the one who loves it. It robs their humanity.

  2. […] The Oracle at Delphi: Mitt Romney’s direct tie to increased unemployment in North Alabama (warmsouthernbreeze.wordpress.com) […]

  3. “The Oracle at Delphi: Mitt Romneys direct tie to increased unemployment in North Alabama Warm Southern Breeze”
    actually enables me contemplate a tiny bit further. I cherished each and every particular section of this post.
    Thanks for the post -Teresa

  4. The key point here is that Delphi was already going under when the funds, whose focus for over four decades has been to takeover failing companies and extract value for their investors, came in and made pragmatic decisions to carve out what little value was left of a company that had been sunk by internal criminals who were supposed to be in charge of it. This was not like the actual Oracle of Delphi, at all, which was raided by external barbarians while it was in an otherwise strong position and looted, this was a dying company run by executives who were looting the company from within (primarily CFO and CEO – the former settled out of court and the latter was fined after losing in court). The company didn’t fail because of the Elliot Management came in 4 years AFTER the bankruptcy was filed – the article clearly points out that the company had been failing to even make payments to its employees’ pensions! The fact Mitt Romney’s, wife’s, blind trust, was an investor with one of the fund companies means he probably new no more about the Delphi woes than any Joe Public walking down the street, and certainly didn’t have a hand in it other than as an investor who had money at risk in a failing company. Finally, why should the government bailout auto companies and wall street? If a company cannot stay in business without taxpayer funded bailouts, the company should simply not be in business. How can you write an article about exposing who destroyed company without even a single mention of the two key conspirators who were held accountable in a courtroom – the CFO and CEO – it’s a bit disingenuous to say the least.

    The article was clearly written with a bias from the outset, even sucking in a reference to the Koch brothers at one point, but the issue shouldn’t be politicized. Its bizarre to me that the Left feel like auto plants should be bailed out but Wall Street should not, and the Right feel that both should be bailed out but claim to want a smaller government… The automotive bailout team put into place by our current Democrat President made the decision to bailout unionized Delphi workers’ pensions and to give the non-union employees nothing – this was highlighted in the SIGTARP Delphi Report from the Inspector General (I’m not lambasting Obama, I bet Romney would have made the same wrong decision had he been president). Our government shouldn’t be in the business of bailing out for-profit companies, PERIOD. Executive Officers of a company that steal retirement funds don’t need fines, they need to spend their golden years in the clink. As a side note, I grew a few miles from the plant the article above is about, have family members who retired from there with wrecked pensions, and know at least two of the individuals quoted in the articles above on a first name basis.

    • Warm Southern Breeze said

      Hi OYB! Thanks for reading & sharing your thoughts. I concur with much your sentiment, and note especially (with great sadness) that the enterprise was “run by executives who were looting the company from within.” The observation of such behavior is not merely spot-on, but such behavior should be a crime. Thanks again!

      • Another key point, is that this plant is not currently a barren wasteland either. Any property like this is going to take some time to re-tenant, but I know there is a large steel manufacturer occupying several hundred thousand feet of the former Delphi space, and another company making components for airplane engines that is either in a former Delphi building or next door to it. I would imagine that both employee very high-paying manufacturing jobs. There are probably others, but I haven’t driven by there in ages.

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