12 October 2005
Delphi as an oracle of sorts
In the 1990s, General Motors spun off its parts business to a separate company called Delphi. This past weekend, Delphi's US operation filed for bankruptcy. What does this portend? Peter M. DeLorenzo, in his capacity as the Autoextremist:
[The bankruptcy of] Delphi, in effect, is the equivalent of the canary in the mineshaft, signaling an entire industry and the nation that the domestic auto industry is at the precipice of unthinkable disaster. Detroit is competing at a dramatic disadvantage in every phase of the game and its stratospherically out-of-whack cost structure is just one part of it. The other part lies in the predatory trade policies, currency manipulation practices and home market protectionism as practiced by Japan, Inc., Korea and China that Detroit is dealing with on a daily basis.
Given the fact that something like one out of every eight jobs in this country is connected somehow to the automobile, this isn't good news for anyone. And where Detroit goes, so goes the nation:
The implosion of Detroit will also be a dramatic wakeup call for the nation itself. This country cannot continue on the path it's going without dealing with the fundamental issues of health care and pensions. And our government simply cannot continue to allow its trading partners to competitively exploit our industries to the long-term detriment and deterioration of our own manufacturing base.
The Delphi bankruptcy marks the beginning of the end for an industry and a way of life, as we know it. It also affords this industry and the country a golden opportunity to reinvent and reposition itself for a brighter, more competitive future.
When one door closes, another opens. But look for some folks to figure out a way to jimmy the locks.Posted at 8:23 AM to Driver's Seat