Delphi Labor Proposal Rejected by United Auto Workers
quote.bloomberg.com
March 29 (Bloomberg) -- Delphi Corp.'s latest offer on wages and benefits was rejected by the United Auto Workers union, which said it expects the bankrupt auto-parts supplier to seek court permission March 31 to scrap its existing contract.
Delphi's March 24 proposal ``wasn't even close'' to something union leaders could submit to rank-and-file workers for a ratification vote, said Paul Krell, a UAW spokesman. Krell said his comments reflect the sentiment of UAW Vice President Richard Shoemaker, who met with union leaders in Detroit yesterday.
The union has threatened to strike should Delphi ask a bankruptcy court for permission to void its existing labor contract and impose new terms. A walk out could also shut down General Motors Corp., which relies on Troy, Michigan-based Delphi for auto parts, and push GM toward bankruptcy.
``We're in discussions with the UAW and we will continue those discussions in hopes of reaching an agreement,'' said Lindsey Williams, a Delphi spokesman. ``If we're unable to reach an agreement, we will move forward with'' court motions March 31 asking for permission to scrap union contracts, he said.
UAW members were offered a payment of $50,000 each in exchange for a 35 percent pay cut, contingent on Detroit-based GM, Delphi's former parent company, agreeing to absorb some of the cost. Wages for long-time Delphi employees would fall to as low as $12 from the current $27.50 if GM doesn't help out. Health-care benefits for retirees would be eliminated.
``The offer would be devastating to Delphi workers, their families and their communities,'' Krell said.
$16.50 an Hour
Under Delphi's proposal, hourly pay for Delphi workers who accept the $50,000 bonus would drop initially to $22 and then to $16.50 on Sept. 3, 2007. GM hadn't yet agreed to subsidize the supplier's wages, the proposal said.
GM's shares fell 55 cents from yesterday's close to $22.20 at 7:14 a.m. in trading before the opening of the New York Stock Exchange.
GM's 7.25 percent bonds denominated in euros due in 2013 fell to 75 cents on the euro, a drop of 1.25 cents, according to Fortis Bank prices. The 5.375 percent euro-denominated bonds due in 2011 of its finance unit, General Motors Acceptance Corp., fell to 90 cents on the euro, a decline of 0.75 cents.
George Anthony, bargaining chairman of UAW Local 292 at a Delphi electrical components plant in Kokomo, Indiana, said court proceedings stemming from a Delphi request could take 45 to 60 days before the judge rules.
Given that timetable, the ruling could come just before or during a convention in which Ron Gettelfinger, 61, is seeking reelection as UAW president. During the convention, the union would also name a replacement for Shoemaker, 66, who is retiring.
Jobs Bank
Delphi's proposal would require workers to pay up to $3,000 a year for health care and eliminate a ``Jobs Bank'' program that pays laid-off employees when they aren't working.
It would also remove automatic wage increases to protect workers from inflation, abolish the union's right to strike, and take away restrictions against selling or closing factories and shipping work to outside suppliers.
GM offered buyouts of up to $140,000 to 113,000 hourly workers in the U.S. last week as part of a plan to eliminate 30,000 union jobs and close 12 North American locations by 2008.
If GM agrees to help Delphi, that company's workers would also be eligible for the buyout payments. |
