How Detroit Benefits from NAFTA

[JohnnyRingo]

17. Delphi didn't leave the mothership because of profitability

Back in the '80s Packard Electric Division of General Motors decided it didn't want to remain a part of the company so it could pursue business from global customers like BMW and Honda without fear that the wiring company would share tech secrets with GM. The result of this corporate divorce was the new Delphi, born in the mid '90s.

GM remained a major part of Delphi's business, but Delphi was still the first to financially stumble in the late '90s. Since having GM take over benefits in case of failure was part of the IUE contract to allow the spin-off, GM assumed pension checks and insurance coverage for union workers. When GM fell on troubled times amid the Great Recession, retirees who were now folded into the UAW, faced cut off of all benefits.

Armed with inked contracts, the union and the Automobile Task Force went to bankruptcy court to fight for continued support from the New GM. Judge Drain allowed that the union would have a seat at the table along with other debt collectors in the reconstruction.

I was one of those who walked into Packard Electric in 1972 for a $6.50 job. I was 19 and retired at 49 with full a pension that included a stipend to carry me over until SS kicked in at 65. Now as a Delphi retiree, I thank the president every 1st of the month for bailing out the company and keeping those union contracts intact.

As for NAFTA and Delphi, the trade deal allowed the company to shift production south to Mexico and close the Warren Ohio operation. Delphi promised that every one of the 14,000 workers would have a chance to finish 30 years, or transfer to another plant and held true to their word under contract. Still, those are 14,000 good union jobs that are gone forever.