Delphi Corp. is the big automotive-related company that filed for bankruptcy this past week.

Also this week, General Motors, the company that spun off Delphi in 1999, announced huge third-quarter losses.

It's fascinating to me to read about these companies and how they deal with their financial woes.

Take Delphi, for example.

The Troy, Mich., based company employs 14,700 workers in Michigan. The Delphi plant in Kokomo employs 5,500 and one in Anderson employs 1,000.

They are the nation's largest automotive parts supplier. They make everything from brakes to radios.

And while the rumors were flying prior to Delphi's bankruptcy filing, the company sweetened the pot for its top executives.

Prior to the filing, severance packages for Delphi's white-collar employees were capped at 12 months of pay. But voila, now Delphi's top executives are eligible for up to 18 months of pay and some of their regular bonus.

The CEO, Robert S. (Steve) Miller, doesn't get that deal. He's working under a $1.5 million-a-year contract with a $3 million signing bonus.

I know that's probably the last thing a company like Delphi wants is to lose its top executives at a time like this.

Nonetheless, that just seems a little extreme to me. I think executive compensation has become a little out of whack in corporate America.

But having said that, I also have a tough time getting 100 percent behind the United Auto Workers.

I have a friend who used to work in the automotive industry. A couple of summers back he told me he wished he would get laid off.

I asked how he could afford that. He said that if the company laid him off, he would get 80 percent of his salary for 36 weeks.

I am sure he and other workers were thankful the union was able to negotiate such a wonderful benefit, but I think it's benefits like those that are putting a hurt on the auto industry.

Delphi is proposing hourly wage cuts of 60 percent as part of its Chapter 11 restructuring.

Delphi workers make $27 per hour. That's $56,000 per year without any overtime.

Now, I think taking those workers down to $10 per hour is a bit much to ask. But come on, doesn't $27 sound like a bit much?

What entitles a guy running a screw gun in the automotive biz to make more than a teacher, a cop, a nurse, a fireman or all manner of other occupations?

It's a simple answer. It's the UAW. And those benefits drive up the cost of cars.

As the price of cars go up, market shares go down.

That's precisely what's happening to GM, which this week reported a net loss of $1.1 billion on continuing operations in the third quarter.

This despite total revenue of $47 billion, up from $45 billion in the same quarter last year.

GM is losing market share. To stave off those market share losses, GM boosted sales incentives and sold more cars to rental fleets.

After all, if you have to pay workers up to 80 percent of their salaries if you lay them off, you might as well have them building cars - even if the cars are being sold at lower margins to rental fleets.

Or to consumers who get the "employee pricing" deals.

At least you would have GM cars on the road to preserve a base of customers and retain market share.

GM also could work up enough cash to pay its huge retirement obligations.

It's not working.

GM's market share continues to slide.

With the price of gas rising, new cars sales industry-wide are down 5 percent from the peak in 2000.

And GMs lineup of vehicles is top heavy with SUVs. That was one of the automaker's strongest markets in both sales and profits.

Full-size SUV sales are off 20 percent so far this year industry-wide. The Chevy Tahoe is down 30 percent.

Something has got to give. Well, more like everything has got to give. A company simply can't go on losing more than a billion dollars a quarter.

I think GM has to redesign and put fuel-efficient models on the road. I think they have to trim some of those different brands that compete against each other, Chevy, Buick, Pontiac, Cadillac, etc.

And GM is going to have to ask the union for concessions. It will be interesting to see how the union responds.

Take health care.

Right now GM employees pay nothing for health insurance.

A couple of years ago, Caterpillar got the UAW to go along with a deal for retirees and employees to pay around $80 per month for their health insurance.

If just GM union retirees paid that much, it would save GM around $400 million a year.

GM's union contract will be renegotiated in 2007.

I think GM is going to have to wrestle concessions from the union on health care and the ability to trim the workforce.

If it can't, it will wind up like its spinoff company, Delphi.

*****

I play golf and I live in Syracuse. So, of course, I was acquainted with Darrell Krugman.

By now, anyone even remotely interested in the news about Darrell this week knows how highly regarded he was as a golf pro and a human being.

One only needs to drive along Ind. 13 north through North Webster and Syracuse to see the impact he made. Tow-in signs and marquees in front of numerous businesses carry messages of support for his survivors.

I wanted to share a personal experience I had with Darrell, which shows just the type of guy he was.

A few years back I decided I needed a golf lesson and scheduled one with Darrell.

Even though I was a member at Maxwelton, I'd played several rounds at South Shore and took part in more than a few charity outings there.

Also, my son played on the Wawasee golf team and South Shore was the home course, so I spent a good deal of time there watching him play.

So I got to know Darrell over the years, but we never actually played golf.

On the day of the lesson, we went out to the range and he watched me hit several shots. Then he gave me some really solid golf advice and some drills to work on. I hit some more balls and got some more advice. He was an excellent golf teacher and to this day I think about his advice when I hit a golf ball.

After much longer than the scheduled amount of time, we ended the lesson. I asked how much I owed him.

"Oh, there's no charge," he said. "I just really wanted to see you swing a golf club."

I'll miss you, Darrell. God bless you. [[In-content Ad]]