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From the Detroit Free Press:

Unions call Delphi pact unlikely by deadline

Friday filing looms; wage-cut offer blasted

March 29, 2006


Union leaders, unhappy with Delphi Corp.'s latest wage-cutting proposal, say they doubt they'll reach a labor agreement with the auto supplier by Thursday.

Without a deal in hand, CEO Steve Miller will likely ask a bankruptcy judge on Friday to cancel the company's union contracts. The unions, including the UAW, have threatened to launch a strike that would reverberate throughout the auto industry.

Last Friday, Delphi offered to pay union workers $50,000 in exchange for 35% wage cuts.

Sona Camp, president of UAW Local 292 in Kokomo, Ind., and George Anthony, the local's shop chairman, told members in a flyer that "there is no way our UAW leadership will bring this proposal to the membership for a vote."

In a letter sent to Delphi on Tuesday, Henry Reichard, chairman of the International Union of Electrical Workers, said Delphi offended his union by trying "to cram these proposals down our throats at the last minute."

"Your assertion that you hope to reach an agreement this week on a new agreement is ludicrous," said Reichard, who represents 12,500 Delphi workers and retirees. "Your letter is nothing more than lip service to the idea of negotiations while you prepare your motion to rip up these contracts."

Delphi spokesman Lindsey C. Williams said the company will continue efforts to reach a resolution with the IUE, its other major unions and General Motors Corp.

The IUE already has voted to strike Delphi, the nation's largest auto parts supplier, if Miller cancels contracts. The UAW, Delphi's largest union with 23,000 members there, said it also will strike if Miller nullifies the contracts.

Filing the request to eliminate labor contracts would create an onslaught of nationwide plant disruptions that undoubtedly would affect GM, Delphi's chief customer employing nearly 80,000 Michigan workers and 142,000 people in the United States. A strike at Delphi would affect the entire automotive industry.

The IUE could not provide a copy of Delphi's proposal, but IUE spokeswoman Lauren Asplen said typically the two unions have similar contracts.

Delphi's wage proposal for UAW employees depends on help from GM in subsidizing wages, according to an update of the proposal on UAW Local 292's Web site.

Delphi's current average hourly wage of $27 an hour would be cut to $22 per hour starting July 3 and eventually reduced to $16.50 per hour in September 2007.

Under the proposal, skilled trades workers will be paid $28 per hour starting July 3 and $24 per hour starting September 2007. In exchange for employees accepting the reduced wages, Bloomberg reports, GM is offering Delphi employees $50,000 each, commonly referred to as a buydown.

On March 22, Delphi, GM and the UAW reached a deal to reduce the supplier's and automaker's workforces. If Delphi's bankruptcy judge, Robert D. Drain, approves the deal, 1,300 Delphi workers with more than 27 years of experience will be offered $35,000 to retire, or 5,000 of them can secure jobs at GM.

To make room at GM's plants, the automaker is offering its own seniority-based buyouts ranging from $35,000 to $140,000.

After the three parties announced their deal, leaders of Delphi's second and third largest unions, the IUE and United Steel Workers, flew to Detroit for a review.

Reichard said, "While I am not a lawyer, I find it hard to believe that Congress intended to let a company ignore a union for months and then expect them to reach an agreement in one week that radically transforms their wages and other conditions of employment."

He added that Delphi has not given his union key documents to effectively evaluate the proposal. "This is not good-faith bargaining."

That's not true, according to Williams.

"Delphi has shared over 700 documents with its unions and their professional advisers over the past several months," Williams said, adding that the IUE was included in the document dispersing. "Additionally, Delphi has responded to every IUE request. Numerous discussions have occurred with the IUE leadership prior to and since the company's Chapter 11 filing last October."

Reichard said the IUE is willing to continue negotiations this week.
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