Hourly Delphi Corp. workers represented by the UAW agreed to wage cuts and plant closings by more than a 2-1 ratio, the union announced today. The vote is a key step in Delphi's plan to emerge from Chapter 11 reorganization as a mostly overseas electronics supplier to the auto industry.
The UAW said 68 percent of the workers who voted approved the deal. It calls for top production wages at Delphi to fall from $27 an hour to $18.50.
Under the plan, Delphi also plans to close 10 U.S. plants, keep four open, sell four others and transfer to GM three plants if they cannot be sold.
Voting on the agreement was cumulative among the eligible 17,000 UAW members, but results reported independently from some of the largest locals had shown widespread approval.
Delphi has said it must have the cuts in labors costs to complete its reorganization. The deal removes the threat of a strike that could have crippled the company and former parent General Motors, Delphi's biggest customer.
The agreement itself was disclosed by dissident union members. It designates plants for retention, sale, or closure and future jobs that made for varying support among the units.
Support varied among the 13,000 recent hires and the 4,000 veterans, who would take wage and benefit cuts. Thousands of long-term workers took retirements or buyouts in 2006 that allowed Delphi to hire replacements at lower wages and benefits.
LOCKPORT OPPOSITION
The agreement ran into stiff opposition in Lockport, N.Y., where members voted against the deal by a wide margin. The local has a large percentage of long-term workers who will take wage and benefit cuts.
But support was at least significant if not overwhelming at other locals that disclosed results to Reuters.
GM said in a statement it was pleased by the ratification of the four-year labor agreement between UAW and Delphi, and was encouraged by the progress in Delphi's reorganization.
Delphi expects to keep plants in Lockport and Rochester, N.Y.; Kokomo, Ind.; and Grand Rapids, Mich., under the agreement. The deal also gave job guarantees in Dayton, Ohio; Flint, Mich.; and at one Saginaw, Mich., local.
The company has designated its steering plant in Saginaw for sale, as well as plants in Sandusky, Ohio; Adrian, Mich.; and Cottondale, Ala.. It plans to exit 10 other sites.
The ratification vote was put on a fast track following the announcement of an agreement last Friday. Plants shut down for two weeks at the beginning of July.
The deal also requires U.S. Bankruptcy Court approval. Delphi and the local units also must negotiate individual work rules for the plants.
The agreement cuts wages for long-term employees from about $27 per hour to the $14 to $18.50 an hour of recent hires. That remains above early Delphi demands for wage cuts to about $10 per hour.
To make the wage cuts more palatable, long-term employees would receive $105,000 over three years and Delphi would extend offers of buyouts, retirement or returning to work at GM.
Delphi, which filed for bankruptcy in October 2005, still plans to exit bankruptcy by the end of 2007.
MONTHLY REPORT
The ratification came on the same day that Delphi released its monthly operating report showing that financial losses again narrowed in May.
Delphi posted a net loss of $45 million in May compared with a net loss of $249 million in the year-earlier period.
Delphi's overseas operations continued their steady profitability. Those operations posted a net profit of $59 million in May compared with a net profit of $65 million in the year-ago period.
The U.S. Bankruptcy Court requires Delphi to report its operating results every month. The financials are unaudited.
