Delphi's problems the tip of the iceberg

Oct 12 2005 by Brian Amble Print This Article

The woes afflicting automotive component manufacturer Delphi could only be the tip of the iceberg for America's once-mighty domestic auto industry, says David Litterick in the Daily Telegraph.

Simply put, both GM and Ford are battling such crippling health care and pension liabilities that they can't sell enough cars to turn a profit.

GM's health care bill likely to top $6billion this year. While it has done its best to tackle expenses, there is only so much the company can do when it must support 250 former workers and their families for every 100 current employees.

Furthermore, GM workers contribute only 7pc of their health care bills, rather than the 30pc most US workers have to pay. It all adds up to $1,500 on every car sold.

Daily Telegraph | Take pay cut or face sack, says Delphi