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The New Corporate Bankruptcy
and What You Need to Know About It
Dr. Greg Ketchum, 12/03/05
If you’ve been following the news you know
that Delphi Corporation, the world’s second
largest auto parts manufacturer and formerly
a part of GM, filed for Chapter 11 Bankruptcy
protection in October. Now this move by Delphi
is just the latest and most glaring example
of a trend that is rocking American companies:
filing for bankruptcy as a way of cutting wages,
pension plans and health care benefits.
In its Chapter 11 filing Delphi is seeking
to slash hourly wages by up to 60 percent and
to drastically reduce both pension and health
care benefits for it’s workers. At the same
time Delphi is asking the court to approve a
$500 million executive compensation package
it says it needs to keep its executive team
Now, aside from corporate greed, this trend
of driving down wages and benefits is the result
of the US being part of a global economy competing
with foreign companies where wages and benefits
are dramatically lower than they are here.
What Does This
Mean to You?
It means that you’ve got a choice to make.
Continue to passively count on your employer
for your security and hope this trend doesn’t
Take full responsibility for your career
now and start managing it like it’s your
OK Dr Greg, I want to take responsibility
for my career, now what? Well, here are 3
action steps that will get you on your way
to running your career like a business.
Be On The Lookout for Your Next Opportunity:
Don’t get complacent in your current job,
but don’t job hop either. Build up your
network of friends and contacts while you
have a job and do what you can to help them.
Having a strong network in place is one
of the single best moves you can make for
your own career security.
Start Your Own Retirement Plan:
Set up your own 401k plan now. Start with
the free handbook “Protect Your Pension:
A Quick reference Guide” available from
the US Dept. of Labor.
Set Up Your Own Health Insurance Plan:
Check out setting up a “Health Savings Account,”
which is a tax-free savings account combined
with a high deductible health insurance
plan. Your contributions to the plan are
tax-deductible, both the interest earned
and withdrawals for qualified medical expenses
are tax-free. It works in some ways like
a medical IRA and only became available
at the beginning of 2004.
The changes rolling American companies are
part of a global trend and will continue to
impact wages, benefits and job security. Counting
on your employer for security today is foolhardy.
The only way to safeguard your future is to
take responsibility now and run your career
like it’s your business, because that’s what
®2005 All rights reserved. Gregory
A. Ketchum, Ph.D.