I responded to this post yesterday and somehow it does not appear to be here. I agree that this is economic, not political, and I think a discussion of economic conditions that affect the domestic auto industry is within the rules. The fact is that standards set when we were a creditor nation with a huge manufacturing base no longer apply to a debtor nation with a service economy. We are no longer the 800 pound gorilla that can do as it pleases and ignore the rest of the world. The "war" on the middle class is the enviable result of what we have become as part of a global economy, and the middle class is losing this war. Companies like Delphi, GM and Ford simply cannot remain viable with the loads placed on them by contracts and legacy, and the bankruptcy court appears to be their only way out.
We are the largest consumer on the planet, with 71% of our GDP from personal consumption compared to Europe's 58%, Japan's 55% and China's 42%. We have a negative savings rate compared to Europe's 14%, Japan's 8% and China's 35%. We have a growing national debt to service, a growing trade deficit, rising energy costs, interest rates rising and a weak growth of real wages .... not a pleasant scenario for a prosperous middle class. I am not saying the sky is falling, but it has some really dark clouds.
Dono

 

Lots of posts were lost yesterday in a DB crash.

 

Some interesting notes on the Dephi bankruptcy. Their filing (and strategy) is being handled by the same firm that shepherded K-Mart through- and they're good. How good?

The Friday before Columbus Day, Delphi did electronic fund transfers to a number of their suppliers. At a second after 5:00PM Friday, they then drained all their bank accounts- in front of a three day weekend with a Monday bank holiday. They filed their BK noon Saturday- sliding under the magic October 17th BK reform deadline (the one designed to keep all those deadbeat credit-card holders feet to the fire ).

Sooo... many suppliers that thought they'd been paid discovered a week later that the transfers had bounced like rubber *****, way too late to get a court injunction to stop the emptying of the bank accounts. Since these suppliers now are hit with unexpected large losses, we can expect more layoffs in the surrounding industries that supplied to Delphi. All this from an insider at one of these companies.

I don't know why I'm grappling with this, but I'm beginning to think some Corporations have a fuzzy way of looking at this whole "ethics" thing, ya know?