There are numerous reasons that may push companies to bankruptcy and also a vast range of repercussions. In this light, this paper seeks to analyze the case of Delphi Corp’s file for bankruptcy. Formerly a part of General Motors, Delphi Corp was still an integral part of GM before the spun off. This brought about major implications, a major one being the conflicting role which GM played in the collective agreement made between them and the United Auto Workers Union.
Delphi Corp’s filing for chapter 11 of the bankruptcy code further elevated the duty by GM to fulfill their part of the collective agreement and meet the liability of worker’s benefits and wages. In this analysis, there will be a discussion of the problem of bankruptcy and the factors which led to its development. In addition, the issue of high labor costs will be highlighted as the major causation factor of the losses experienced by Delphi Corp. Furthermore, the role played by collective agreements in labor relations will also be discussed. This brings to attention the influence of unions in defending the rights of workers in cases of bankruptcy. From causes will be to evaluate various actions in resolving this problem and the eventual follow up process.
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