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Delphi's Miller could address health care next, He says bankruptcy exit is priority
date: June 5, 2008
SOURCE: Detroit Free Press
BY JEWEL GOPWANI
Could the nation's health care system be the next restructuring challenge for turnaround expert Steve Miller?
For now, leading Troy supplier Delphi Corp. out of bankruptcy is Miller's priority.
But the man who helped lead restructurings at Bethlehem Steel, Chrysler Corp. and even the Detroit Symphony Orchestra hasn't ruled out taking a role in trying to solve what he called the "country's No. 1 domestic political and economic issue."
During a speech to the Detroit Economic Club on Wednesday, Miller noted areas to pull $1 trillion of waste out of the system by, among other things, reducing the number of malpractice suits, expanding wellness programs to prevent illness and replacing paper records with electronic ones.
"One of the biggest factors in a decision to put new investment offshore is the punitive effect of health care costs on job creation in America," Miller said.
Broaching health care is one of the many things he is considering after Delphi emerges from bankruptcy protection.
A timeline for that is unclear. The supplier is embroiled in a legal battle against a hedge fund that pulled out of a plan to buy $2.55 billion in the supplier's stock, a key piece of the company's reorganization plan to leave Chapter 11.
Since Delphi filed for Chapter 11 in 2005, the company has spent more than $300 million on legal and professional fees for the company and other stakeholders in the case.
As Delphi's stay in bankruptcy continues, the U.S. auto industry continues to shrink.
On Wednesday, GM said it plans to idle four truck plants by the end of 2010, making it especially tough for suppliers such as Lear Corp., American Axle & Manufacturing and Delphi Corp. which all count GM as their largest customer.
But Miller's message for the future of the U.S. auto industry is an optimistic one.
"There will be a strong American-based automotive industry for decades to come," Miller said. "The question is which companies will be at the top when the dust settles."
That the U.S. auto industry is resilient, even amid announcements of production cuts, layoffs and financial losses, was the message that resonated with students who attended Miller's speech.
"He did give hope for the future, that the automobile market always will be around," said Colleen Osak, a junior at Troy Athens High School, who attended with her Advanced Placement economics class. "He didn't give any indication that it will be moving out of Michigan anytime soon."
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