Monday, November 20, 2006

Delphi gets more time for labor talks

Thursday, November 09, 2006
Delphi gets more time for labor talks
Judge gives auto supplier until Nov. 17 to work out deals with its unions and creditors.
Tiffany Kary / Dow Jones News

NEW YORK -- Delphi Corp. won more time to continue negotiations with its unions, creditors and other parties that might allow the company to cut labor costs without triggering a strike, a lawyer for the company said Wednesday.

At Delphi's request, Judge Robert Drain of the U.S. Bankruptcy Court in Manhattan gave the company until Nov. 17 to try to work out a deal, Delphi attorney Jack Butler said. He spoke after a closed-door meeting between Drain and other lawyers for Delphi, its unions and creditors.

The parties are scheduled to meet Nov. 17 for another status conference and the judge will decide whether or not to continue the adjournment of hearings on the matter, Delphi spokesman Lindsey Williams said.

Tom Kennedy, an attorney for the IUE-CWA union, said all parties were still actively negotiating and "nothing is resolved yet."

Delphi, the largest U.S. maker of automobile parts, filed for Chapter 11 bankruptcy in October 2005 and has been in drawn-out talks with unions as well as its former parent, General Motors Corp., to try and reach a new labor agreement and ward off a possible strike.

Butler also said that the company's negotiations with some of its investors are proceeding: "they have participated actively in all the framework discussions since our last chambers conference," he said. He didn't discuss the investors by name, but Appaloosa Management LP, a hedge fund run by billionaire investor David Tepper, has said it's contemplating a "negotiated business arrangement" with Delphi that could involve either new financing or a rights offering, once the company emerges from bankruptcy.

Bargaining between Delphi and its unions has been going on outside the courtroom since March, when Delphi filed motions to cancel its labor agreements and cancel billions of dollars worth of supply agreements with GM. The company also said it planned to close or sell 21 of its 29 unionized factories in the United States.

Delphi's biggest union, the United Auto Workers, threatened to strike if the labor agreements were canceled. GM, meanwhile, said Delphi's threat to scuttle its supply agreements amounted to "blackmail." To avoid a confrontation, Delphi put hearings on the motions on hold and sought a settlement.

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