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Delphi Offers UAW Workers Wage Deal

The parts maker would pay employees $50,000 each to take a 35% pay cut. Otherwise, it may try to void contracts.

March 28, 2006|From Times Wire Services

Delphi Corp., the ailing auto parts supplier, has offered United Auto Workers union members $50,000 each in exchange for a 35% pay cut.

The offer is contingent on General Motors Corp., Delphi's former parent, helping pay the wages of Delphi workers, according to a March 24 contract proposal obtained by Bloomberg News.

Hourly pay for Delphi workers would drop initially to $22 and then $16.50 on Sept. 3, 2007. If GM doesn't help out, wages for longtime Delphi employees would fall to as low as $12 an hour from $27.50, according to the proposal.

The offer was delivered to Delphi's UAW locals Monday, three days before Delphi Chief Executive Steve Miller's deadline for an agreement. Miller has threatened to ask a U.S. Bankruptcy Court judge to cancel contracts Friday if no accord is reached.

The UAW has threatened to strike if the court allows the contracts to be thrown out.

"If today's offer is what the international UAW gives the locals for ratification, my people are going to be standing out there with picket signs," George Anthony, bargaining chairman of UAW Local 292, said at a Delphi electrical components plant in Kokomo, Ind.

GM, Delphi's biggest customer, hasn't yet agreed to subsidize the supplier's wages, the proposal said.

Paul Krell, a UAW spokesman, said the union had received Delphi's offer but declined to comment further.

Lindsey Williams, a spokesman for Troy, Mich.-based Delphi, and Jerry Dubrowski, a spokesman for Detroit-based GM, had no comment.

Delphi has said it must have at least the framework of a comprehensive deal on wages, benefits and job cuts by Thursday or it will file court papers Friday to start the process of voiding labor contracts and changing retiree benefits.

Failure to reach agreement eventually could lead to a strike at Delphi. Because of just-in-time production, a strike could quickly hurt GM, which buys billions of dollars in parts from Delphi.

Analysts have said wage and benefit concessions may be a much tougher sell to Delphi's nearly 34,000 unionized hourly workers in the U.S. than the retirement incentive plans.

The retirement plans require Bankruptcy Court approval, but concessions would require ratification by hourly workers as well as court backing. Union leaders reacted harshly to initial Delphi post-bankruptcy proposals to cut base wages to about $9.50 an hour. Delphi later withdrew those early proposals.

Under plans announced Wednesday, about 13,000 UAW workers at Delphi are retirement-eligible and 5,000 could return to work at GM.

An additional 4,000 workers would be retirement-eligible if Delphi works out similar deals with its other unions.

Nearly all of Delphi's U.S. hourly workers are represented by unions; about 24,000 belong to the UAW.

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