Delphi plans 20,000 layoffs UAW calls final offer an insult
Delphi Corp., the largest US auto-related company to file for bankruptcy, wants to eliminate more than 20,000 US jobs and isn't trying to reach an agreement on wages and benefits, union leaders said.
A proposal Delphi calls its final offer would trim its union workforce in the United States to about 10,000, from 33,650 now, United Auto Workers president Ron Gettelfinger said yesterday in Detroit. He said the offer ''is an insult and we will not ask the locals for a vote." The company said it narrowed the proposed wage cut and called its offer ''competitive."
Delphi, the largest US auto parts maker, filed for court protection Oct. 8 for its US operations after chief executive Steve Miller failed to win concessions from unions and financial aid from former parent General Motors. Miller has said he will ask the bankruptcy court to let Delphi impose terms if unions don't agree to pay and benefit reductions before Dec. 16.
''Miller, by taking such a visible and hard line, may have underestimated the UAW," said labor professor Harley Shaiken at the University of California at Berkeley. ''The union would like to see a settlement, but not at the cost of 60 years of gains."
Delphi said it made a ''competitive offer based on conditions dictated by the market." The proposal would provide $21 an hour in wages and benefits, the company said. That's about a third of the rates Delphi inherited when GM spun off the parts supplier in 1999.
The UAW is the largest of six unions in Mobilizing@Delphi, a coalition formed Nov. 3 to fight the plans to cut wages and benefits for their members while paying bonuses to executives.
The unions would have the right to strike if the bankruptcy court voids their contracts with Delphi, Gettelfinger said. He said a decision to strike would have to be made by the members. The UAW represents 24,000 Delphi workers.
A UAW strike at Delphi could disrupt General Motors' North American assembly plants within 48 hours, Sean McAlinden, a labor analyst at the Center for Automotive Research in Ann Arbor, Mich., said last month. A three-month strike at Delphi could bankrupt GM, said Brian Johnson, an analyst at New York-based Sanford Bernstein, in a report.
GM shares fell $1.32, or 5.8 percent, to $21.29.
''I don't think Delphi and the unions will reach an agreement, and it sounds like the unions won't give a counterproposal before the Dec. 16 deadline," said Eric Selle, a high-yield bond analyst at Wachovia Securities in Charlotte, N.C..
Miller last month asked the UAW to accept wage cuts to as little as $9.50 an hour from $27.50, the elimination of healthcare for retirees, fewer vacation days, and reduced pensions and other benefits. Delphi hasn't had an annual profit since 2002 and has reported net losses of $1.53 billion in this year's first three quarters.
