Kevyn Orr’s 'Cowpie Moment' Recalls Steve Miller’s at Delphi

August 06, 2013, 11:26 AM by  Doron Levin


Truth tellers risk getting rocks thrown at their heads.  That’s why so few of them hang around in the vicinity of ugly, bitter bankruptcies, divorces and child-custody battles.

Let’s get real, folks. Kevyn Orr wasn’t off the mark by observing that Detroit was “dumb, lazy, happy and rich” for too long. The city’s financial collapse was decades in the making. Lots of smart people yelled the warning “Wake up! You’ll be broke one day!” Those in charge chose not to hear the warnings and failed to heed them.

The usual suspects now are employing the diversionary tactic of making an issue of Orr’s choice of words.

Even before his statement, one clueless mayoral candidate (and former city attorney) went so far as to boast she would “fire” him if elected. Except for the inconvenient fact that he’s an African American, the race card already would have been played.

The usual suspects will fail in their mission to undermine Orr; so let’s stop wasting time parsing his grammar and word choice. It’s now time to proceed with the messy business of resolving Detroit’s debts and figuring out how to establish credit as quickly as possible.

Restoring the city’s credit is critical to its future and may well involve selling prestige art that belongs to the city. Orr would like to avoid dismantling the Detroit Institute of Art.  It’s a pity if it happens, of course, but not nearly in the same league as leaving pensioners without money for food, shelter, clothing or medicine. Anyone out there think hanging onto a valuable painting is more important than feeding a human being?

When Steve Miller took over as chairman and chief executive of failing Delphi in 2005 the automotive supplier was in much the same condition as the city: Lots of potential, lots of fine assets, catastrophic financial condition.  Delphi, the onetime parts subsidiary of GM, tried to reason with its labor unions (and with GM) about reaching an equitable solution to out-of-whack labor costs as an effort to stave off bankruptcy.

The talks failed.  But in the course of negotiations, Miller had the temerity to assert that spending “$65 an hour for lawn cutting” at a Delphi radiator plant near Buffalo, New York mightn’t be the wisest course for preserving precious financial assets. The union attacked Miller personally and used his illustrative anecdote as a pretext to dig their heels in further. Naturally, none of the posturing was enough to stave off bankruptcy. Numbers are numbers.

If you haven’t looked at reorganized Delphi Automotive lately, you should. Four years after emerging from bankruptcy the restructured company is one of the top performers in the automotive business, with a slew of new products and healthy profits. The stock has roughly tripled in value since its initial public offering. Who would have guessed such an outcome was possible after four years in Chapter 11?

Miller, who went on to help reorganize AIG as chairman, took plenty of abuse from union critics, even after reducing this salary to $1. Orr will get plenty more of the same before the bankruptcy is over.  But when it’s over, he’ll be a hero to those with a sense of responsibility and those who believe that Detroit deserves a better tomorrow.

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