Monday, June 19, 2006

Delphi offers buyouts to 8,000 workers

Monday, June 19, 2006
Delphi offers buyouts to 8,000 workers
Supplier will extend deals worth $35,000 to $140,000 to members of its second-biggest union.
Brett Clanton / The Detroit News

Under a new deal that will hasten the retirement of thousands more U.S. auto workers, Delphi Corp. agreed to provide retirement incentives and buyouts to 8,000 hourly workers represented by its second-largest union.

The pact announced over the weekend with the International Union of Electrical Workers-Communications Workers of America expands a Delphi buyout program that had been available only to members of the United Auto Workers, the company's biggest union.

The buyouts will shield workers from the impact of Delphi's brutal downsizing in Chapter 11 and lower the troubled parts maker's long-term labor costs.

The IUE-CWA deal is another sign Delphi is making progress in talks with its six unions on a broader wage-cutting agreement the company says it needs to emerge from bankruptcy by next year.

But those talks could still explode into an industry-crippling strike if Delphi wins court approval to reject its labor contracts. Delphi is scheduled to return to bankruptcy court on Aug. 11 to push for authority to ax the contracts unless it has a deal by then.

The IUE-CWA and the parts maker reached the buyout deal after months of negotiations. But union officials were cautious not to claim victory.

"We have made great progress in resolving the first part of a very complex puzzle," said the IUE's Automotive Conference Board Chairman Willie Thorpe, who announced the deal the day following his election to succeed Henry Reichard, who died last week.

"Our members now have options that can provide them with some financial security. Next, our focus turns to crafting an agreement for those who remain in the plants that gives them a job worth having."

Delphi, which filed for bankruptcy in October, says it needs to lower wages by up to 60 percent and close or sell 21 of 29 U.S. factories to be competitive with other domestic parts makers.

Under a deal reached in March, Delphi said it would offer up to $35,000 to 13,000 UAW workers who are near or eligible to retire. That program was expanded this month to include cash buyout offers, ranging from $40,000 to $140,000, to 10,000 more UAW workers with fewer than 26 years on the job.

Last week, UAW President Ron Gettelfinger said more than 8,500 UAW workers at Delphi have signed up for the offers, and another 25,000 workers have signed up for a similar program at GM.

The new buyout offers are good news to Gene Collins, 58, an IUE member at a Delphi plant in Dayton, Ohio.

"I'm definitely leaving," said Collins, who has 16 years seniority and is eligible for a $140,000 payment.

Asked what he will do with four years before his pension begins, Collins said he'll find something.

"If you're a worker, there will still be work out there," he said. "But the money won't be the same."

About 8,000 hourly workers represented by the IUE-CWA are eligible to participate. Some will be offered a lump-sum payment of $35,000 to retire, Delphi said, while lower-seniority employees can take buyout packages ranging from $40,000 to $140,000.

Workers who are 50 years old with 10 years on the job can exit with a "mutually satisfactory retirement," while workers with between 26 years and 30 years can leave and grow into retirement.

Workers with at least 10 years of seniority can take a $140,000 buyout payment to leave with only their accrued pension benefits. Workers with between 3 and 10 years of seniority are eligible for a $70,000 payment, while those with between 1 year and 3 years of seniority can receive $40,000.

The plan also permits the transition of up to 3,200 Delphi workers represented by the IUE-CWA to GM for retirement purposes.

GM will pick up half the tab for the IUE buyouts and cover post-retirement benefits for those retiring. The automaker is a party to the deal because it spun off Delphi in 1999 and still has obligations to former employees there.

The IUE retirement program must be approved by the bankruptcy court. The rollout will begin prior to that, but no payments will be made until the court has approved the program.

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


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