Delphi corp. previously Packard Electric in Ohio, is facing chapter 11 bankruptcy, wage cuts and buy outs for workers, and one large bonus for the man who "turned around" the failing company.
Delphi Corp. based in North East Ohio has went through major restructuring which include lay offs, buy outs, and wage cuts to remain afloat.
Robert S. "Steve" Miller the self proclaimed "Turnaround Kid" is now heading the company in an effort to save it from going under. Delphi Corp. is now undergoing Chapter 11 Bankruptcy and as part of the restructuring process, in the settlement Robert Miller is asking for 8.3 million dollar bonus on top of the 3 million dollar bonus already paid to him by the company. This bonus comes on the heels of buyouts, contract renegotiation, and 50% wage cuts. Even with the wage cuts Delphi Corp has one of the highest entry level wages in Trumbull County, OH.
Bankruptcy lawyers are still addressing an 87.3 million cash bonus plan to reward the 261 Executives that ride with the business through bankruptcy.
The Tribune Chronicle reports:
International Union of Electrical Workers-Communications Workers of America attorney Tom Kennedy asked Miller if he were willing to take his proposed $8.3 million bonus in company stock.
“I have a preference for cash,” Miller replied.
“So do creditors,” Kennedy retorted.
Delphi's chief products were previously Chevy Cavaliers, which eventually were replaced for a short period of time by the Cobalt.
Miller spent three months negotiating with General Motors and the unions before moving the company into bankruptcy. Hearings in the bankruptcy case were held and on January 19th Miller gave testimony.
In cross-examining Miller, United Auto Workers attorney Peter DeChiara noted that Miller received a $3 million signing bonus to join Delphi in July 2005, just three months before taking Delphi into bankruptcy. Miller noted he gave up other income to take the job.
DeChiara asked Miller if he expected to get $8.3 million when he took over at Delphi. Miller replied he didn’t expect to take the company into bankruptcy.
“I spent three months trying to work with General Motors Corp. and the unions. I had no expectations of earning a bonus,” he said.
To counteract the claims of lost income, DeChiara pointed out that Miller worked on a book titled "Turnaround Kid" with a writer that describes his efforts to help failing companies. He also held positions with other companies.
Miller joined Delphi Corp, on January 1, 2007 while also serving as a director of two other diverse public companies: Symantec and United Airlines and as a board member on the Economic Alliance of Michigan.
Presiding over the hearing is Judge Robert Drain who announced closing arguments followed by his ruling will occur on Tuesday.
