Exhaust Maker Exasperated by Delphi's Chapter 11
Former GM subdivision Delphi filed for bankruptcy on October 8, 2005. Despite potential deals with a number of financially well-endowed suitors (including Chrysler's eventual buyer), there they remain. Still bankrupt. Still making parts. The CEO of one of Delphi's partners in the global exhaust biz is none-too-happy with this state of affairs. In an interview with Just-auto.com [full interview by sub], Borsal boss Bos slammed U.S. Chapter 11 rules, claiming that firms emerge from bankruptcy protection with an "artificially low asset base." The exec of the family-run firm says the post-bankruptcy company can then offer products at lower price than companies that have been run responsibly. "I feel that it is grossly unreasonable and unfair." Bos proclaimed. Yes, well, Delphi ain't out of Chapter 11 yet.
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It will be a "self-fixing" situation. Companies such as GM, Ford and Chrysler, which treat their suppliers like drek will go down in flames (and essentially, if any of these three companies were anything but one of the big 2.8, they would have already died) and the responsible companies (both car manufacturers and suppliers) will survive and thrive. Essentially, I see this type of commentary is a crack in the dam in the global auto & auto supply industry. I read between the lines and see "why should these poorly run companies drag the rest of us down? Let them die." To which I would say - kizmet. (Karma?) The one-time big 3 didn't have any problems watching all of their US competitors go down in flames over the past 100 years, and there have been literally thousands of companies which real people put their fortunes into as investments - which were all lost. Note that the Japanese work differently - on all levels. Interestingly, the larger Japanese car companies have never pushed the smaller ones out of business, and suppliers are looked upon as partners - and thus the Japanese car companies wish to keep them profitable (by "allowing" (?!) them a profit).
This why we call Chapter 11: "Creditor's Prison".