Gloom and doom is predicted for the benefits world in this article from the LATimes.com: “U.S. Labor Is in Retreat as Global Forces Squeeze Pay and Benefits.” The thrust of the article is that as companies seek to compete globally, they will continue to slash wages and benefits–health care benefits, pension benefits, and others–“in order to come closer to what the rest of the world gets.” The article notes the irony of Delphi’s website which still currently states that Delphi “offers its full time employees world class benefits.” Due to its recent bankruptcy filing, the article reports that Delphi workers will be asked to take pay-cuts equal to two-thirds of their salaries, with benefits cuts as well:
. . . Delphi workers in the United States, management says, must earn something closer to what the rest of the world gets.Vacations reportedly will be slashed from six weeks to four weeks. Healthcare premiums will be higher. The company’s pension contributions will be lower. Paid holidays will shrink from 17 a year to as few as 10. And wages will fall sharply, to as low as $10 or $12 an hour. Those levels would make it unlikely that Delphi workers would be able to afford the cars they’re helping to build.
Robert S. Miller, the restructuring specialist brought in this summer to run the company, . . . described the process as akin to a storm. “Globalization has swept over them,” he said at a news conference.
It’s a storm that has ravaged other American industries. “This is death by a thousand lashes . . . “
UPDATE: More on the subject from Wharton: “A Bumpy Road for Delphi, GM and U.S. Auto Workers.” The article refers to what’s happening in benefits as a “seismic shift in the pension and healthcare landscape.”