Reality for Dummies
Wednesday, March 08, 2006
"
My Letter to Steve Miller...Again...
"

OK, I'm reposting this letter simply because I couldn't get the archive link to the original post to work.  Bleh.

 

OK, I put pen to paper (really, fingers to keyboard), and fired off a letter to Steve Miller, CEO of Delphi Corporation.  As well as sending it to the NY Times, Washington Post, LA Times, Detroit Free Press, and a couple of other people.  It won't make a damn bit of difference, but it did make me feel better...


Dear Mr. Miller,

 

 

As you have been straightforward with your employees to this point, please allow me to be straightforward with you as well.  I took the time the other day to read the opening day presentation that was presented to the bankruptcy court outlining the reasons Delphi was forced to file for Chapter 11.  I didn't find any references to the accounting scandal that cost this company in excess of $4.7 billion.  I was more than slightly disheartened to find that the majority of Delphi's financial ills are being blamed on our uncompetitive labor agreements.  I find this, in some ways, to be very deceptive.  Let me explain.

 

It's been said that when you know better, you do better.  I believe a very good argument could be made that if our unions had a true financial picture of Delphi when our last contracts were negotiated, we could have taken steps to prevent this current debacle.  It would have been irresponsible to negotiate for today, if we truly had a picture of what jeopardy tomorrow was in. 

 

Many locals, in fact, have competitive hiring agreements in place.  I, myself, was hired under such an agreement.  The unions have, in many cases, readily cooperated with management to reduce costs and keep our business viable.  So to portray the cancer that is eating away at Delphi's viability to be the unionized work force, is a sham.  We were never given the opportunity to truly bargain in good faith, and with good information.

 

If the unions are to be held accountable for accepting generous labor contracts, then management should bear responsibility of offering them when they knew they could ill afford them.  Someone had to know what kind of financial shape Delphi was in long before this year.

 

These beliefs that I hold, however, do not change our current situation.  This bus has truly been driven off into the ditch, and your first key to righting the ship is to impoverish the hourly workforce whose sacrifices built this company to the giant that it is today.  That is, sir, just a bit of a slap in the face.    

 

To suggest slashing someone's pay in excess of 60%, eliminating benefits and thousands of jobs in the process, is, well, more than "fairly dramatic", as you put it.  Perhaps such monumental proposals would be easier to bear if there were hope of bringing new business to these areas with the savings created by the cuts, but that doesn't seem to be the case. 

 

To the objective observer, one might think that the ultimate plan would be to eliminate all domestic production and reap the whirlwind overseas.  I'm not too sure myself, but it seems more likely than not.  It was the profits made here that allowed Delphi to create its vast global empire. 

 

I read somewhere that have said that you are aware of the stress these kinds of developments can create, and want to try to "soften the blow" to the affected employees.  How, exactly, does one soften the blow of devastating the standard of living that it has taken a lifetime to create?  To be brutally honest, once you leave Delphi, you can return to your semi-retirement in Oregon, a wealthy man.  Should we successfully emerge from Chapter 11, what's left of the United States work force will be leaner, more productive, but much poorer. 

 

It is heartbreaking to me that tens of thousands of my fellow hourly employees are in the same state of mind that I find myself in.  We are scared.  We find ourselves hanging on to the empty shells of what our dreams for the future used to be.  The atmosphere that is created by this uncertainty in our workplace is nothing short of toxic.  You urge us to keep our customers first in our thoughts and continue to produce world-class quality products.  We're doing it, but it is becoming increasingly difficult. 

 

If the reality that "life is going to be different" isn't already too much for many of us to bear, we must also bear your insults in the media.  You speak of us as though we were ignorant, robotic human assets that aren't worth the wage we're being paid.  I take great offense to that.  Many hourly employees have taken advantage of countless hours of training made available to us.  I am personally certified as a Six Sigma Green Belt (manufacturing), as well as one of our location's hourly trainers for the IUE-Delphi Quality Network Problem Solving.  All of these programs are intended to make our employees more efficient.

 

In closing, Mr. Miller, I would like to thank you for taking the time to read my letter.  I doubt anything I have said will change the course of what is to come, but at least I will know that I have had the chance to speak my mind.  You cannot realistically say that we are the bane of Delphi's financial existence.  Nor can you say that bankrupting tens of thousands of union employees is the cure.

 

Thank you for your time,

 

Spencemo

Delphi Packard Plant 15



Posted at 06:18 am by spencemo
C'mon...Bring it!!!  

Wednesday, February 01, 2006
"
Na Na Na Na, Hey Hey Hey, Goodbye...
"

OK, since I've decided to be a lemming, I'm taking my blogging business elsewhere...

To visit my new home, go to the new Reality For Dummies.

 

See ya...



Posted at 12:11 pm by spencemo
C'mon...Bring it!!!  

Friday, January 06, 2006
"
I'm Makin' a List...
"

I'm stealing this from Geor3ge, even though he didn't ask me to join in (*sniff*)...OK, I thought that Geor3ge didn't tag me, but he really did (guilt trip over, be sure to take all of your belongings with you...)

Seven Things To Do Before I Die

1. See Phantom of the Opera in the West End.
2. Go to college.
3. Own a Harley Davidson motorcycle.
4. See the Bears play in Soldier Field.
5. Ditto the White Sox at Comiskey Park (OK, US Cellular fucking Field).
6. Learn how to make the perfect lasagna.
7. Learn to tango.

Seven Things I Cannot Do

1. Drive a stick shift.
2. Keep from correcting my stepdaughter when she says "I've saw".
3. Listen to "Feed Jake" or "He Stopped Loving Her Today" all the way through.
4. Understand what's so interesting about 99.9% of "reality television".
5. Like George Bush.
6. Stop my dog from licking the carpet without breaking the law.
7. Miss CSI: (the originalnot the spinoffs).

Seven Things That Attract Me to...Blogging

1. Answering the question "what's a blog?" 48 times a week.
2. The vain hope that someone famous might 'discover' me.
3. Being able to express myself for the world to seefor free.
4. Knowing that, every so often, someone does read it.
5. When TMB comes around and starts being his old TMB self (kept this one from Geor3ge's list).
6. Inspiring someone else to express their opinions, too.
7. Telling that person that they are full of shit, and they have no clue who I really am.

Seven Things I Say Most Often

1. "Way to go, Einstein."
2. "Is your room clean enough to be on the computer?" (stepdaughter only)
3. "Good job, you".
4. "Are you fucking kidding me?!"
5. "Fuck."

6. "Nala, Randy, finish up, lets go!" (dogs only)
7. "Plant 15, Spencemo* speaking." (work only (*name changed to protect the innocent))

Seven Books That I Love

1. Bill Clinton, My Life (OK, I couldn't get past page 47, but it's one hell of a paperweight)
.
2. Lewis Black, Nothing Sacred.
3. Shel Silverstein, Where the Sidewalk Ends.

4. Any good cheezy, sleazy, historical romance novel (I'm such a chick).
5. E.B. White, Charlotte's Web.
6. Roget's Thesaurus.
7. My high school yearbook.

Seven Movies That I Watch Over and Over Again

1. Dirty Dancing (the original, not that Havana Nights shit)

2. Ghost (OK, I do have a bit of a thing for Patrick Swayze, sue me)
3. The Sound of Music
4. Die Hard
5. Any Star Wars

6. The Lion King
7. Somewhere in Time

Seven People I Want To Join In Too

Oh hell, I don't know

 



Thursday, January 05, 2006
"
Yep, It's Relevant to Delphi...Well, It Fits, Anyway...
"

Well, I know that I've been very neglectful here, but I've got something for your reading pleasure today.  I can't take credit for it, I got it in my email today, but, damn if it isn't appropriate for anyone following the trials and tribulations of Delphi...enjoy...

In the beginning there was the plan.

And then came the assumptions.

And the assumptions were without form. And the plan was without substance.

And darkness was upon the face of the workers.

And the workers spoke amongst themselves, saying, "This is a crock of shit, and it stinks."

And the workers went unto their supervisors and said, "It is a pail of dung, and we can't live with the smell."

And the supervisors went unto their managers, saying, "It is a container of excrement, and it is very strong, such that none may abide it."

And the managers went unto their directors, saying, "It is a vessel of fertilizer, and none may abide its strength."

And the directors spoke amongst themselves, saying, "It contains that which aids plant growth, and it is very strong."

And the directors went unto the vice presidents, saying, "It promotes growth, and it is very powerful."

And the vice presidents went to the president, saying, "This new plan will actively promote the growth and vigor of the company with very powerful effects."

And the president looked upon the plan and saw that it was good.  And the plan became policy.

And that my friends, is how shit happens.



Posted at 08:28 pm by spencemo
C'mon...Bring it!!!  

Monday, December 05, 2005
"
Spencemo's Letter to Congress
"

OK, starting today, autoworkers & their familes are encouraged to participate in an e-hearing focusing on the, you guessed it, growing problems in the auto industry.  If you'd like to participate, send your letter, along with name, address, phone, & email address to autocrisis@mail.house.gov

Well, here's my letter...

Dear Representatives:
 
Please allow me to introduce myself, I am an employee of Delphi Packard Electric.  I would like to share with you my views of the bankruptcy at Delphi, as well as the growing crisis in the American auto industry.
 
I took the time to read the opening day presentation that was given to the bankruptcy court outlining the reasons Delphi was forced to file for Chapter 11.  If you should read it, you won't find any references to the accounting scandal that cost this company in excess of $4.7 billion.  It is very disheartening to find that the majority of Delphis financial ills are being blamed on our uncompetitive labor agreements.  I find this, in some ways, to be very deceptive.  Let me explain.

Its been said that when you know better, you do better.  I believe a very good argument could be made that if our unions had a true financial picture of Delphi when our last contracts were negotiated, we could have taken steps to prevent this current debacle.  It would have been irresponsible to negotiate for today, if we truly had a picture of what jeopardy tomorrow was in. 

My coworkers and I are only the latest victims of corporate restructuring, as business after business circles the globe for the cheapest labor they can find.  And yet, as our jobs are shipped overseas, the executives of our very companies line their pockets with the great savings near-slave labor rates bring. 

Even now, as Delphi's hourly employees are asked to take brutal wage and benefit cuts, our CEO seeks extravagant bonus packages to retain "key" employees during our restructuring.  Who is more key than the people that make your product?  Perhaps some of us could swallow this more easily if these bonuses were being used to recruit new talent to right the ship, instead of enriching the executives that drove a viable business into the Chapter 11.

My fellow workers and I have spent generations in these factories helping to build the global empire that Delphi has become.  I have followed my father and uncle proudly into Packard Electric.  The past profits from our efforts here in the North American operations are the very monies used to create the successful overseas facilities that, oh by the way, were not included in the bankruptcy filing. 

There are many solutions out there.  Hopefully, we, as a nation, will be able to find them before the American auto worker, as well as the American middle class, are extinct.

Thank you for your time,

Spencemo...


Thursday, November 17, 2005
"
Spencemo's Recommended Delphi Reading
"

I saw this commentary today from Bloomberg, and thought it was worth sharing...

Delphi's Bankruptcy Plan Is Gold for Management
Bloomberg

By Graef Crystal (Commentary)

Nov. 17, 2005

Call it tacky, unseemly or crass.

Your choice. Mine is all three.

To Delphi Corp., it's acceptable: To survive bankruptcy and emerge as a viable company, persuade a bankruptcy judge to approve a lavish set of self-enriching compensation plans for a corps of executives, while simultaneously doing everything to slash worker pay and benefits.

Reminds me of attorney Joseph Welch's accusation aimed at Senator Joseph McCarthy during hearings in the 1950s, in which McCarthy attacked the U.S. Army for being filled with communists: Have you no decency sir, at long last!

It's not that Delphi shouldn't keep good managers and bring in others from outside the company: It's that what is being recommended is way too much.

Delphi, aided by compensation consultant Watson Wyatt Worldwide and by the law firm of Skadden, Arps, Slate, Meagher & Flom LLP, is trying to assure itself that the company's top management will be doing just fine even if its workers take it on the chin and in the gut. Those more than 33,000 workers face wage cuts to $9.50 an hour from $27.50, as well as reduced pensions and other benefits.

Troy, Michigan-based Delphi is peddling the argument that to survive bankruptcy, its top management team has to be paid handsomely, or else all will shortly depart for greener pastures.

That argument raises three questions:

-- Why keep in place a top management team that has already demonstrated its inability to, well, manage?

-- For those with industry-specific experience, just where are those greener pastures? Hello; the entire U.S. automotive industry is in deep trouble.

-- For those with skills that can be useful in other industries, why can't Delphi easily replace them, if necessary?

The talent pool here is huge.

The executive compensation proposal has four parts, and there's quite a bit wrong with three of them. First, we have a new annual incentive plan. The performance metric upon which bonuses will be predicated is earnings before interest, taxes, depreciation, amortization and restructuring costs (EBITDAR for short). EBITDAR goals will be set for six-month periods, with participating executives afforded the opportunity to earn bonuses twice a year.

What's wrong?

-- Delphi creditors may not be overjoyed to find that the top management's pay will be insulated from the burden of interest costs. Under current arrangements, bonuses are predicated on net earnings, a metric that implicitly penalizes management for taking on debt that doesn't pay for itself in the form of increased profits.

-- And eliminating restructuring costs could offer considerable temptation to move other costs into that category and therefore increase bonuses.

-- In its pleading, Skadden Arps claims that shortening the incentive window to six-months will increase the incentive to meet the targeted goals. If that's the case, why stop at six months? How about once a week? A six-month bonus program allows a participant to earn a bonus at least for half a year's good results even though the full-year results are abysmal.

Part two of the proposed new executive pay arrangements features a new Emergence Bonus Plan. Under it, participating executives can earn cash bonuses ranging from 30 percent to 250 percent of their salary upon confirmation of the plan of reorganization or a sale of all or substantially all of the company's assets. The higher you are in the food chain, the higher is the cash bonus opportunity.

What's wrong?

-- Skadden Arps makes the following statement in its pleading: Noticeably absent is any form of retention plan. It also states: The Key Employee Compensation Program does not include a retention or stay component which differentiates it from other incentive programs.

Really! You could have fooled me.

If you can get a cash bonus of 250 percent of your salary for staying with the company, how can that not be characterized as a stay or retention bonus? Ah, lawyers. What they can do with words is an amazing thing to behold.

Under the third part of the proposed new arrangements, we have tons of company stock, rather than cash. Assuming Delphi emerges from bankruptcy, it is proposed that equity incentives equal to 10 percent of the new common shares outstanding be available for distribution to 600 executives. A third of those awards would be in free shares with the rest in stock option grants.

Again, what's wrong?

-- To justify carving aside such a lavish amount of equity, Watson Wyatt has presented some statistics that, to my way of thinking, have, at best, dubious utility. Among other things, Watson Wyatt says that other companies coming out of bankruptcy typically reserve about 11 percent of equity in the first year after their emergence. It also says that the median company among those comprising the Standard & Poor's 500 Index reserves 13 percent of its equity over a three to five year period.

So which is it: Three years? Five years? Or four years? It makes a big difference. Besides, it's hard to find in the proposals any ironclad guarantee that all that equity won't be airdropped over Delphi's headquarters on a single day --like the day after the company emerges from bankruptcy. If that happens, you can be sure that the company's management will shortly be back to its compensation committee, with tin cups rattling away.

-- In its presentation, Watson Wyatt assumes that Delphi will emerge from bankruptcy with a market cap of approximately $4 billion. If that assumption holds, and if Delphi's stock goes on to double, then 600 participating executives will earn $400 million from their equity grants.

For a group that large, that's a pretty impressive amount.

Remember, too, granting free shares and option shares equal to 10 percent of the shares outstanding says nothing about what percentage Delphi's executives will haul away from any increase in the company's future stock price.

I have tested the proposed handout all the way to a future market price that is 20 times the initial price coming out of bankruptcy and still can't get to a point where executives are taking out as little as 10 percent of the increased stock price.

Think also that if the future stock price remains the same as the initial price or falls, the management takeout, compared with the increase in market price, becomes infinite. Nice deal for executives. Not so nice for shareholders.

To get a better handle on this 10 percent proposal, I selected all 30 U.S. publicly-traded companies with total employee headcounts in the range of 125,200 to 245,200.

(Delphi's current headcount is 185,200, right in the middle of this range.) For the year 2004, the median company granted stock options that, in number, were equal to just 1.1 percent of the shares outstanding. To be sure, some of those companies would also have made some free share grants, as well.

So perhaps the 1.1 percent might rise to, say, 1.5 percent, were those free share grants to be counted. Still, on the basis of this analysis (which relies on Aon Consulting's eComp database), I can't get to 10 percent, except over, say, six to seven years. Remember here that Delphi's headquarters are in the Detroit metropolitan area, not in San Jose. Detroit is not now, nor has it ever been, stock option heaven.

And finally, there is a severance plan -- though of relatively modest dimension -- for those who are discharged for other than cause or who resign for so-called good reason.

So there you have it. All bases covered. No deaths. No serious injuries. At best, a few ankle sprains requiring a bit of ice.

As for Delphi workers: Put those sea-sickness patches behind your ears. There's rough weather ahead.


I like this guy.  He knows bullshit when he sees it.


Saturday, November 12, 2005
"
My Civic Duty...
"

As I believe that it's my civic duty to do my best to share high quality, educational films with all of those that read my blog, I would like to submit to you that everyone should go here and educate yourselves.

Have fun,
Spencemo


Friday, October 28, 2005
"
WOO HOO!!! Part Deux...
"



Posted at 12:12 pm by spencemo
C'mon...Bring it!!!  

Monday, October 24, 2005
"
Open Letter To Delphi's CEO...
"

OK, I put pen to paper (really, fingers to keyboard), and fired off a letter to Steve Miller, CEO of Delphi Corporation.  As well as sending it to the NY Times, Washington Post, LA Times, Detroit Free Press, and a couple of other people.  It won't make a damn bit of difference, but it did make me feel better...


Dear Mr. Miller,

 

 

As you have been straightforward with your employees to this point, please allow me to be straightforward with you as well.  I took the time the other day to read the opening day presentation that was presented to the bankruptcy court outlining the reasons Delphi was forced to file for Chapter 11.  I didnt find any references to the accounting scandal that cost this company in excess of $4.7 billion.  I was more than slightly disheartened to find that the majority of Delphis financial ills are being blamed on our uncompetitive labor agreements.  I find this, in some ways, to be very deceptive.  Let me explain.

 

Its been said that when you know better, you do better.  I believe a very good argument could be made that if our unions had a true financial picture of Delphi when our last contracts were negotiated, we could have taken steps to prevent this current debacle.  It would have been irresponsible to negotiate for today, if we truly had a picture of what jeopardy tomorrow was in. 

 

Many locals, in fact, have competitive hiring agreements in place.  I, myself, was hired under such an agreement.  The unions have, in many cases, readily cooperated with management to reduce costs and keep our business viable.  So to portray the cancer that is eating away at Delphis viability to be the unionized work force, is a sham.  We were never given the opportunity to truly bargain in good faith, and with good information.

 

If the unions are to be held accountable for accepting generous labor contracts, then management should bear responsibility of offering them when they knew they could ill afford them.  Someone had to know what kind of financial shape Delphi was in long before this year.

 

These beliefs that I hold, however, do not change our current situation.  This bus has truly been driven off into the ditch, and your first key to righting the ship is to impoverish the hourly workforce whose sacrifices built this company to the giant that it is today.  That is, sir, just a bit of a slap in the face.    

 

To suggest slashing someones pay in excess of 60%, eliminating benefits and thousands of jobs in the process, is, well, more than fairly dramatic, as you put it.  Perhaps such monumental proposals would be easier to bear if there were hope of bringing new business to these areas with the savings created by the cuts, but that doesnt seem to be the case. 

 

To the objective observer, one might think that the ultimate plan would be to eliminate all domestic production and reap the whirlwind overseas.  Im not too sure myself, but it seems more likely than not.  It was the profits made here that allowed Delphi to create its vast global empire. 

 

I read somewhere that have said that you are aware of the stress these kinds of developments can create, and want to try to soften the blow to the affected employees.  How, exactly, does one soften the blow of devastating the standard of living that it has taken a lifetime to create?  To be brutally honest, once you leave Delphi, you can return to your semi-retirement in Oregon, a wealthy man.  Should we successfully emerge from Chapter 11, whats left of the United States work force will be leaner, more productive, but much poorer. 

 

It is heartbreaking to me that tens of thousands of my fellow hourly employees are in the same state of mind that I find myself in.  We are scared.  We find ourselves hanging on to the empty shells of what our dreams for the future used to be.  The atmosphere that is created by this uncertainty in our workplace is nothing short of toxic.  You urge us to keep our customers first in our thoughts and continue to produce world-class quality products.  Were doing it, but it is becoming increasingly difficult. 

 

If the reality that life is going to be different isnt already too much for many of us to bear, we must also bear your insults in the media.  You speak of us as though we were ignorant, robotic human assets that arent worth the wage were being paid.  I take great offense to that.  Many hourly employees have taken advantage of countless hours of training made available to us.  I am personally certified as a Six Sigma Green Belt (manufacturing), as well as one of our locations hourly trainers for the IUE-Delphi Quality Network Problem Solving.  All of these programs are intended to make our employees more efficient.

 

In closing, Mr. Miller, I would like to thank you for taking the time to read my letter.  I doubt anything I have said will change the course of what is to come, but at least I will know that I have had the chance to speak my mind.  You cannot realistically say that we are the bane of Delphis financial existence.  Nor can you say that bankrupting tens of thousands of union employees is the cure.

 

Thank you for your time,

 

Spencemo

Delphi Packard Plant 15

 

 

 

 

   



Monday, October 17, 2005
"
On a Happier Note...WOO HOO!!!
"




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