How to fix Detroit
(FORTUNE Magazine) – Controversial Delphi CEO Robert "Steve" Miller, 63, recently took the auto-parts maker into bankruptcy. A onetime Chrysler labor negotiator, he's presided over several companies in Chapter 11, such as Bethlehem Steel and Federal-Mogul. The UAW won't like it, but could his four-point plan for Delphi help Ford and GM?
STRATEGY ONE: Change employee expectations "We've got 60,000 workers in Mexico. Labor there is paid $7,000 a year. Before long it's going to be very difficult for someone with a manual-labor job in the U.S. to have the kind of lifestyle they've enjoyed up to now. It ain't going to happen."
STRATEGY TWO: Rewrite the social contract Miller wants to cut Delphi's wage-and-benefit package from $65 an hour to around $20 an hour to get closer to labor costs abroad. If the UAW doesn't come around by mid-December, he may ask the U.S. Bankruptcy Court to void the current labor contract.
STRATEGY THREE: Don't worry about a strike "There's nothing to be gained [for the union] other than to accelerate and expand the number of plants that have to be closed."
STRATEGY FOUR: Get the government to help with health care He's already met with Senator Hillary Clinton. "One of the things on my to-do list is to spend time in Washington to help formulate policies to take the burden off the employer."