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UAW Prepares Counteroffer for Delphi

May 3, 2007
Related Topics: Mergers and Acquisitions, Labor Relations, Latest News
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The United Auto Workers union is preparing a counterproposal for Delphi Corp. in an effort to break a negotiating stalemate, a UAW local leader said Wednesday, May 2.

Art Reyes, president of UAW Local 651 representing workers at Delphi’s Flint, Michigan, East plant, said the information came from UAW vice president Cal Rapson on Wednesday at a General Motors-Delphi strategy meeting in Detroit.

He said Rapson revealed no details of the counterproposal to the latest offer made by Delphi on March 21. That plan, which would have cut wages below the $14 an hour earned today by new hires at Delphi, was rejected by the UAW as “miserably short” of acceptable.

A group of private equity funds led by Appaloosa Management have agreed to buy Delphi for up to $3.4 billion if it can get new labor agreements with the UAW and five other unions that represent U.S. workers.

Another UAW local leader at the meeting said afterward that “we’re done bargaining” if Delphi rejects the counterproposal.

“We’re not going to accept $12 an hour and half the benefits,” says the union source. “You might as well not have a union then.”

A spokesman for the UAW International could not be reached for comment. A Delphi spokesman declined to comment.

Reyes said sacrifices by the UAW are starting to show on Delphi’s bottom line and further sacrifices would be hard to extract.

The 29 plants and operations that Delphi put in Chapter 11 protection in 2005 posted an operating loss of just $11 million in March on sales of about $1.51 billion.

For all of 2006, Delphi posted a net loss of $5.12 billion. That included charges of $2.93 billion for a worker attrition program.

Those early retirements and buyouts have transformed Delphi’s hourly workforce.

More than 20,000 UAW members took the buyouts. They earned $28 an hour with comprehensive benefits, while the workers who replaced them earn $14 an hour to start with limited benefits.

Delphi is trying to leave Chapter 11 reorganization as a largely overseas company concentrating on electronics rather than hundreds of commodity products, such as spark plugs and oil filters.

The UAW has been preparing the new workforce at Delphi for a fight if Delphi tries to have U.S. Bankruptcy Court Judge Robert Drain void the company’s labor agreements. UAW president Ron Gettelfinger has said the union will strike if the contracts are voided.

The union leadership is working its way to all 21 Delphi plants with UAW representatives to share with the workers the proposal rejected by the union. The members-only meetings are part informational and part rally.

Filed by Jamie LaReau and David Barkholz of Automotive News, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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