Parting shot: Delphi exec Steve Miller blasts UAW in new book

David Shepardson / The Detroit News

WASHINGTON — Delphi Corp. Executive Chairman and former CEO Robert S. "Steve" Miller blamed the bankrupt auto supplier’s woes on its largest union in a memoir to be released Tuesday. Miller defended his tenure at the top of Delphi and his decision to recommend that the company file for Chapter 11 bankruptcy in October 2005, comparing himself to a surgeon and Delphi to a "desperate patient who waited too long to seek treatment."

"I had become a national scapegoat for what ails Detroit," Miller wrote in "The Turnaround Kid: What I Learned Rescuing America’s Most Troubled Companies."Miller reveals previously undisclosed details of Delphi’s difficult negotiations with the United Auto Workers union, General Motors Corp. and hedge fund Appaloosa Management LP about how to cut costs and finance its exit from bankruptcy as a smaller, but healthier company.

The criticism of UAW President Ron Gettelfinger is scathing, asserting that the union chief was so angry he refused to meet with any Delphi executive during the last six months of talks and "simply couldn’t get along with anyone at Delphi.

"If he could have his way, he’d probably have us all run out of town with tar and feathers," Miller wrote, and the talks were at times suspended for a few days to allow Gettelfinger "to get over his latest temper tantrum."

UAW spokesman Roger Kerson and Delphi spokesman Lindsey Williams declined comment.

Gerald Meyers, a University of Michigan business professor who has read the book, was surprised at the bitterness toward Gettelfinger. "The book really exposes the deep enmity with Gettelfinger," Meyers said. "I didn’t know the anger was so deep."

But Miller also acknowledged that he "might have gone too far" with his criticism of hourly workers’ pay, especially his comments about workers being paid $65 to cut lawns at plants.

"I hadn’t intended to mock them," he wrote, saying he later bought a UAW hat in Lockport, N.Y. to show respect. "I would never equate their skilled labor with pushing a mower."

Miller tracks his career

Publisher HarperCollins gave The Detroit News access to an electronic copy of the 253-page book. Miller is declining interviews because of Delphi’s bankruptcy battle.

In the book, written with author Michael D’Antonio, Miller, who plans to leave Delphi when the Troy-based supplier emerges from bankruptcy, recounts the highs and lows of a career that earned him a reputation as a rescuer of troubled companies.

It traces his rise from Ford Motor Co. and Chrysler Corp., including his role in the 1979-80 federal bailout of Chrysler, to his time leading turnarounds as a top executive at Federal-Mogul, Waste Management, Bethlehem Steel and Aetna, among others.

But the memoir also is deeply personal, painting a much softer picture of a man denounced for demanding harsh pay and benefit cuts and closing plants. "These companies had never been mere numbers to me," Miller wrote. Very few people understood he was "a flesh-and-blood human being with compassion and emotion, not some one-dimensional caricature with a digital calculator for a heart."

The outspokenness he is known for is evident throughout.

Miller wrote that auto executives had long known the problems of the industry’s high labor cost structure, especially its health care and pension bills, and that manifested itself at Delphi, which he called "an industrial basket case." Under his leadership, Delphi is cutting its hourly work force in half and closing or selling 21 of 29 plants.

"Delphi’s day of reckoning could no longer be put off, and to be realistic, its distress signaled just the start of what will be a painful but necessary restructuring of the entire American car and truck manufacturing industry, which people loosely call ‘Detroit,’" Miller wrote.

Miller says he warned GM Chief Executive Rick Wagoner at a meeting the day before Thanksgiving 2005 that it could cost $12 billion to save Delphi.

Wagoner told Miller the company was looking at other options, saying "his group had been searching the globe for alternate suppliers and ‘you’d be surprised’ by how well GM might cope without Delphi," Miller wrote.

GM spokesman Tony Cervone said he had not seen the book and could not speak about it directly.Delphi, spun off by GM in 1999, remains its largest supplier, providing just over $1,500 in parts per GM vehicle. GM has already set aside $7.5 billion to cover charges from Delphi and said it would loan the supplier up to $2.8 billion to help it emerge from bankruptcy.

Miller warned "a disastrous outcome for Delphi could take down General Motors and much of Detroit with it."

But he also credits GM with the big breakthrough with the UAW: a decision to offer cash payments of up to $140,000 per worker to take early retirement or a buyout, which was extended to Delphi workers in a bid to cut labor costs.

U-M’s Meyers said Miller’s alarms were largely validated by the historic labor deals reached last fall between Detroit’s Big Three and the UAW, allowing the companies to replace thousands of veteran workers with lower-paid new hires and shift retiree health care costs to the UAW.

But Miller was often the target of sharp criticism. One Delphi worker sent him an e-mail that read: "Hope You Burn In The Deepest Bowels of Hell For All Of Eternity." One Detroit reporter tried to make "me look at Gordon Gecko" — the unethical trader in the movie "Wall Street," Miller wrote. He acknowledged that the barbs took a toll.

"I had become a pinata for organized labor and demagogues unconcerned with complex realities," Miller wrote. "Making me the bogeyman was just unnecessary."

Amid the criticism, the company decided in late 2005 to largely stop talking to the news media.

The policy, dubbed "Project Nerka," was named after the submarine in the movie Run Silent, Run Deep to counter the perception that Miller risked becoming the personification of the bankruptcy.

"He really became the target for labor," Meyers said.

Wife battled cancer

Meyers, a former chairman of American Motors Corp. and a friend of Miller’s, said the book opened a window on Miller’s personal life and showed "a guy wrongly thought of as hard as nails, impenetrable and hard as nails."

Miller writes movingly of his wife of nearly 40 years, who waged a three-month battle with an inoperable brain tumor that ended in her death in 2006.

She often counseled — and criticized — him on some of his decisions relating to Delphi.

He even asks if his work had prevented him from discovering her illness in late 2005. "Was I too busy to notice Maggie was failing?" he wrote, noting she started to bounce checks.

He writes of her awful last days, when she didn’t know how to put toothpaste on a toothbrush and couldn’t recognize a bowl of soup.

As her health deteriorated, he stayed on at work. While in New York for two days of intense negotiations with GM, creditors and stockholders, Miller received word that his wife’s last moments were near.

He raced to her bedside at Beaumont Hospital in Royal Oak on Aug. 11, 2006, but got caught waiting for thunderstorms to clear and learned she had died 20 minutes before he arrived while holding their oldest son, Chris’s, hand.

"I was racing the clock to reach her bedside from New York. I was crestfallen to arrive too late, but I suspect Maggie would have loved the excitement," he wrote. "I told Maggie I loved her and would miss her. I leaned over and kissed her and held her hand. She was still warm to the touch."