Friday, June 30, 2006

Delphi hires 2,000 temporary workers

Wednesday, June 28, 2006
Delphi hires 2,000 temporary workers
They make $14 per hour to replace workers who earned up to $27 and retired, took buyout.
Jeff Bennett / Bloomberg News

Delphi Corp., the biggest U.S. auto-parts maker, hired 2,000 temporary workers to replace thousands of more expensive union members who are taking early retirement or buyouts.

The temporary employees are being trained at U.S. plants before moving into jobs held by United Auto Workers members, Delphi spokesman Lindsey Williams said in an interview Tuesday. Most temporary hires will earn $14 an hour rather than the $27 now paid to union workers.

Delphi, which filed for Chapter 11 protection for its U.S. operations Oct. 8, said that 12,600 workers accepted retirement offers made in March, and it expects more to take buyouts under a June program. The company is trimming employment to reduce costs under its plan to exit bankruptcy by mid-2007.

"There should be some short-term loss of productivity but the lower wages rates should more than compensate," said Morgan Keegan & Co. fixed-income analyst Pete Hastings.

Williams said that "ample time is available to train new or temporary employees prior to many of our employees departing, which will occur throughout the year."

UAW spokesman Paul Krell couldn't be reached to comment.

The company doesn't yet know how many workers it will need as a result of the departures, Williams said.

Delphi is in the process of closing 21 of its 29 U.S. manufacturing sites, and some of the remaining plants may not need as many workers because the company also is exiting product lines.

"The focus may now be on the numbers of people, but the overriding issue for us is obtaining a comprehensive agreement with our unions," Williams said.

Delphi is in talks with the UAW and five other unions over proposed changes including cutting hourly wages to as low as $12.50.


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