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More UAW Workers Bankrupt

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Guest Josh
DETROIT -- Oscar Gray achieved the good life during 28 years of hard work at Delphi Corp. -- a six-figure income, a nice home in Holly and two vehicles.

But as Michigan's auto industry tanked in recent years, the forklift operator lost huge amounts of overtime pay and gradually sank into financial ruin. Saddled with $469,000 in debt, he declared bankruptcy last month.

Gray isn't alone. Once the symbol of blue-collar prosperity, Michigan autoworkers are going bankrupt in alarming numbers as vehicle production declines and overtime pay dwindles.

The United Auto Workers' legal department has handled the bankruptcies of nearly 10,000 of its members, retirees and their families in Michigan since 2002, according to Detroit News research of court records. UAW lawyers estimate that Chapter 7 and Chapter 13 filings in Michigan have been growing at a 10 percent annual clip in recent years.

The bankruptcies show that many Michigan autoworkers are failing to scale back their lifestyles in the face of massive changes slamming the state's bread-and-butter industry.

Gray didn't lose his job. His health isn't failing, and he is not going through a divorce -- the typical reasons many declare bankruptcy.

Gray has been losing overtime. His gross pay was cut $16,000 one year, sliding to $87,000, and may dip again because Delphi is considering a Chapter 11 filing.

"You count on something your whole life and then it gets jerked around," Gray said.

While layoffs have soared, it's often autoworkers still on the job who are drowning in debt.

Loss of overtime is one of the top reasons autoworkers have sought bankruptcy protection the past four years, say attorneys for UAW Legal Service Plan. The plan provides free legal aid to UAW members, retirees and immediate family members.

More: http://www.detnews.com/2005/autosinsider/0.../A01-318432.htm

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This guy, as a forklift operator, makes about what three social workers or four high school teachers make around here. Am I supposed to feel bad for the guy?

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General rule of thumb is that you should never be more in debt then three times what you make annually. And save at least 10% of your salary over and above the 10% you should be putting away for retirement. He's making 100k a year. 10% of the into savings of 28 years would be 280,000 not counting any interest. I'll be kind and say that even if he only saved 1/4 of that he'd still have 70k saved up. More then enough to cover a 16k shortfall in salary for one year and give him some time to make some life adjustments to lower his expenses. I'm guessing he hasn't put anything into savings for retirement.... counting on that pension eh? I'm supposed to cry for this guy because he has money management issues?

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