Friday, May 05, 2006

Delphi locals to take strike vote

Thursday, May 04, 2006

Delphi locals to take strike vote

UAW steps up pressure on bankrupt supplier as deadline looms on pay concessions for 24,000.

Brett Clanton / The Detroit News

The United Auto Workers on Wednesday inched closer to a strike at Delphi Corp., giving the go-ahead for its 24,000 blue-collar workers at the bankrupt auto supplier to take a strike authorization vote.

If approved, the vote would allow UAW leaders to call a strike if Delphi tosses out its labor contracts and imposes wage cuts.

But the strike authorization may never be needed if U.S. Bankruptcy Judge Robert Drain, at a hearing next Tuesday and Wednesday, forces the two sides to reach an agreement, as often happens in corporate bankruptcy cases.

Even though a strike vote is largely a procedural step, it shows that the UAW intends to keep fighting Delphi's attempt to cut wages and benefits in Chapter 11, and protest its restructuring plans, which the union believes have been dictated to them rather than worked out through joint bargaining.

"The union is sending a very clear signal to Delphi," said Harley Shaiken, labor professor at the University of California-Berkeley. "It wants to negotiate but there are limits to what it will accept."

Separately, about 12,000 workers at GM and 3,700 workers at Delphi have signed up for a special buyout program, UAW Vice President Richard Shoemaker told union local officials from GM and Delphi at a Wednesday meeting in Detroit, according to two UAW officials who attended the meeting.

The program is designed to trim thousands of factory jobs as part of turnaround efforts at both companies.

Though workers still have nearly two more months to come forward, the numbers suggest the program will allow GM to take a big step toward a goal of eliminating 30,000 U.S. hourly jobs by 2008. Delphi also appears to be making progress in ushering out about two-thirds of its 33,000 U.S. factory workers.

Restructuring is challenge

Plenty of hurdles remain as Delphi and GM try to restructure after huge losses in recent years.

GM, which lost $10.6 billion in 2005, has embarked on a sweeping overhaul of its North American auto business that calls for more than a dozen U.S. plants to close, health care cuts and pension changes. But investors are growing impatient for results.

Delphi, which filed for bankruptcy in October, has drawn the ire of its six unions with plans to close or consolidate 21 of its 29 U.S. factories and proposed draconian wage cuts.

Since November, Delphi, GM and the UAW have held three-way talks over a fix-it plan for Delphi that takes care of former GM workers at Delphi and helps the supplier lower its labor costs, which it inherited from a 1999 spin-off from GM.

In March, the sides announced a sweeping buyout program that appeared to address both GM's and Delphi's labor cost gripes. Under the plan, GM offered buyouts -- ranging from $35,000 to $140,000 -- to all 113,000 of its U.S. hourly workers, while Delphi offered a $35,000 early retirement package to workers with 30 years or more of experience. The program also allows 5,000 Delphi workers to "flow back" to GM to take jobs.

But days later, on March 31, Delphi filed two controversial court motions that quickly exhausted the good will it earned from the buyout program.

One motion aimed to begin dismantling its wage- and job-protecting union contracts, while the other sought to eliminate post-retirement benefits for hourly workers.

The International Electrical Workers-Communications Workers of America, Delphi's second-largest union with 8,500 workers, completed a strike authorization vote in early March to protest the supplier's demands in bankruptcy court.

But the UAW, until Wednesday, held off on the vote in favor of continued talks -- a position that many of its members criticized.

Paul Krell, a UAW spokesman, confirmed Shoemaker called for the strike vote, and said union leaders at Delphi plants must be finished holding the votes by May 14. But he cautioned that a strike may still be a ways off.

Judge Drain will take up Delphi's motions May 9 and 10 in U.S. Bankruptcy Court for the Southern District of New York. After the hearing, he could either issue a ruling, which would come 30 days later, or send the parties back to the negotiating table.

Delphi spokesman Lindsey Williams said the supplier hopes to come to terms with its unions without a strike. "Our focus is reaching a consensual agreement."

GM spokesman Dan Flores echoed the sentiment, and said discussions continue toward that end.

But investors were jittery Wednesday that the situation could come to a peaceful end.

With the UAW strike vote at Delphi raising the temperature of the talks, investors sent GM shares down more than 3 percent in New York Stock Exchange trading to close at $22.49.

The UAW typically takes a strike vote leading up to a negotiating deadline for a new contract, but the Delphi vote is taking on special significance because of the abnormal circumstances of the bankruptcy and heightened tensions around the talks.

Is vote just posturing?

Even so, Wall Street analysts who have followed the talks believe it is little more than 11th-hour posturing by the union.

"Authorizing a strike is much different than calling a strike," said Brad Rubin, analyst with BNP Paribas in New York.

Union leaders have pledged to strike if Delphi wins court permission to void its union contracts, and then unilaterally cuts wages and benefits. In proposals to its unions, Delphi has sought to reduce its $27 per hour wages to as low as $10.50 per hour, exchange pensions for 401(k) plans and cut health benefits.

In court filings late last month, the UAW argues Delphi has not adequately proven its labor costs are the source of its problems and that it is in the interest of all three parties to reach an agreement that avoids a strike.

The strike vote is meant to show that the union still has leverage in the talks, Shaiken said.

"It doesn't preclude bargaining but it is meant to underscore the stakes," he said. "Delphi is essentially saying the court can void the contract, but we (the UAW) can strike."

You can reach Brett Clanton at (313) 222-2612 or


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