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UAW prepares counteroffer for Delphi

Jamie LaReau and David Barkholz From| May 04,2007

The UAW is preparing a counterproposal for Delphi Corp. in an effort to break a negotiating stalemate, a UAW local leader said Wednesday.

Art Reyes, president of UAW Local 651 representing workers at Delphi's Flint East plant, said the information came from UAW Vice President Cal Rapson Wednesday at a GM/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 Delphi new hires, was rejected by the UAW as "miserably short" of acceptable.

A group of private equity funds led by Appaloosa Management LP 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 today 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."

An spokesman for the UAW International could not be reached for comment today. 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 for a worker attrition program of $2.93 billion.

Those early retirements and buyout have transformed Delphi's hourly work force.

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 work force at Delphi for a fight if Delphi tries to have U.S. Bankruptcy 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.

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