First Metre - only connect... the people with the purpose
contact | site map | legal
|
Will GM Beat Ford to Chapter 11? (19 Nov 2005)
For more than a year there has been specultation about which of the two great engines of American prosperity, Ford or GM, will file first for protection under Chapter 11as Japanese competition and rapidly rising fuel costs reduce demand for gaz-guzzling sports utility vehicles (SUV). 


Danger signs were brought into stark perspective when the world's leading car parts manufacturer, an off-shoot of GM, the Delphi Corporation , filed for bankruptcy on October 8 and is now in reorganization. Delphi has approximately 185,000 employees and operates 164 wholly owned manufacturing sites, 41 joint ventures, 53 customer centers and sales offices and 33 technical centers in 38 countries.



Delphi facilities in many countries exhibit some of the leanest manufacturing practices found outside Toyota City but none the less is unable to reverse the drain on its resources. Although Delphi has developed kaizen to a high degree and reduced its operating costs by billions of dollars at the same time as dramatically reducing its defects-per-million rates to single digit values its chances of survival are slight. A shut down strike at Delphi will cripple GM.


What went wrong at Delphi? It was caught by promises made to employees when it was separated from GM in 1999 and the cost reduction demands of its largest customers (led by GM who takes 50% of Delphi's output). Now GM itself faces a bleak future as sales slump, the Auto Workers Union fights management to protect its member's jobs and its $19 billion cashpile slowly melts away honoring retiree and healthcare costs.