Wednesday, May 17, 2006

UAW OKs strike at Delphi

Wednesday, May 17, 2006

UAW OKs strike at Delphi

Union says workers will walk if supplier imposes cuts

Brett Clanton and Bill Vlasic / The Detroit News

The United Auto Workers said Tuesday that its 24,000 members at Delphi Corp. voted overwhelmingly to authorize UAW leaders to call a strike if the bankrupt auto supplier tries to impose wage cuts.

More than 95 percent of the UAW members at 21 Delphi plants voted to back the measure, the union said in a short statement.

"A 95-percent majority really speaks for itself," said UAW spokesman Paul Krell.

The vote highlights the support UAW President Ron Gettelfinger has of members as the union heads toward a potential showdown with Delphi in U.S. Bankruptcy Court.

"The union wants to show that it is united and determined," said Harley Shaiken, labor professor at the University of California-Berkeley. "A strike vote underscores how high the stakes are."

Delphi has asked Judge Robert Drain to void existing labor contracts with the UAW and other unions in order to slash payroll costs and close factories as part of a sweeping reorganization of its U.S. operations.

But if that happens, the UAW now has the option to strike Delphi and shut off the supply of parts to its biggest customer and former corporate parent, General Motors Corp. Still, any walkout would be weeks away, pending the outcome of the deliberations in bankruptcy court.

A strike at Delphi would cripple GM's assembly plants within days, and siphon billions of dollars from the automaker's cash reserves. Merrill Lynch analyst John Murphy has said the automaker would "bleed" $7 billion to $8 billion in cash through the first 60 days of a strike.

Some analysts say a lengthy walkout would force GM into bankruptcy. While GM has said it has stockpiled some parts, a widespread Delphi strike would close GM auto-assembly plants within 48 hours, according to Sean McAlinden, an analyst with the Center for Automotive Research in Ann Arbor, Michigan.0

GM and Delphi executives say they hope to work out a consensual deal with the UAW to provide what Delphi Chairman Robert S. "Steve" Miller called a "soft landing" for workers whose jobs or wages are affected by the reorganization.

But the UAW has not held any formal talks with Delphi in recent weeks, though high-level discussions have occurred between the two sides, according to sources familiar with the situation. Talks are ongoing, however, between GM and Delphi.

GM's chief financial officer, Fritz Henderson, told analysts last week he expected a settlement with Delphi within 30-60 days.

One analyst, however, said a quick settlement of pension and wage issues at Delphi could be very expensive for GM.

"We are concerned that this aggressive timeline may result in GM accepting more adverse settlement terms," said Rob Hinchliffe of UBS Investment Research. "We estimate the deal could cost more than $7 billion."

GM's shares closed down 67 cents, or 2.5 percent, at $25.53 on the New York Stock Exchange after word of the strike vote. Delphi's shares no longer trade on the New York Stock Exchange.

In court hearings last week, Drain instructed the UAW and Delphi to continue negotiating before the case resumes May 24.

The strike-authorization vote was seen as a formality by some Delphi workers in the long-running struggle to preserve jobs and wages.

"It's not a really big subject right now," said Don Yull, a 50-year-old production worker at a Delphi plant in Rochester, N.Y.

Yull said workers are more focused on early-retirement and buyout offers made GM made to its 113,000 U.S. hourly employees and 13,000 workers at Delphi.

He expects employment at his plant to drop substantially because of the program. "For the people being left behind, there's a lot of uncertainty around here," he said.

Despite the heated rhetoric in court from Delphi and UAW representatives, Yull is unconvinced that the union is headed for a strike.

"There's a lot of opportunity for an agreement," he said.

The UAW is by far the largest of Delphi's six unions, representing 24,000 of the company's 33,000 U.S. hourly workers. The International Union of Electronic Workers-Communications Workers of America, which represents 8,000 workers, also has voted to authorize a strike.

The United Steelworkers, International Association of Machinists and Aerospace Workers and the International Brotherhood of Electrical Workers, which represent more than 1,100 Delphi workers, haven't scheduled strike votes. Messages seeking comment were left with Delphi's other union, the International Union of Operating Engineers, which represents about 20 workers.

Detroit News wire services contributed to this report. You can reach Brett Clanton at (313) 222-2612 or


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