Published October 25, 2005
DETROIT (AP) - Delphi Corp., which filed for bankruptcy protection earlier this month, is asking the United Auto Workers to agree to cut hourly workers' pay by more than 60 percent and give up health and pension benefits and vacation time, according to a summary of the auto supplier's proposal distributed to union members in Indiana.
The summary was posted yesterday on the website of UAW Local 292 in Kokomo, Ind., as well as a website run by Kokomo-area union members.
According to the summary, Delphi wants to cut base wages to $9.50 to $10.50 an hour for production workers and $19 for skilled trades workers. New production workers would start at a base rate of $9 an hour. Right now, Delphi hourly workers make $27 an hour or more.
Under the proposal, Troy-based Delphi would eliminate a jobs bank that gives full pay and benefits to around 4,000 laid-off workers, which Delphi says costs it $400 million each year. It also would have the right to sell, close or consolidate any plant.
Delphi's pension plan would be frozen and accept no new participants after Jan. 1, according to the summary. Delphi also could reduce retiree benefits or terminate the pension plan, but no further details were given in the summary.
Delphi and its former parent, General Motors Corp., are still settling how much GM owes Delphi's retirees. GM has said it could be liable for up to $12 billion in pension obligations but expects to pay much less.
Hourly workers would be asked to pay health care deductibles for the first time, of $900 per individual and $1,800 per family. Dental and vision care would be eliminated. The proposal would drop annual paid holidays from 16 to 10, including a paid week of vacation between Christmas and Jan. 1. It also would eliminate annual cost-of-living adjustments.
Neither Delphi nor UAW leadership has officially released details of the proposal, since bankruptcy court Judge Robert Drain granted Delphi's request to keep its contract proposals confidential. Delphi is scheduled to appear in bankruptcy court tomorrow.
A message was left yesterday evening with a Delphi spokeswoman. A spokesman at the UAW's Detroit headquarters said he wouldn't comment yesterday, but union leaders did blast the proposal when Delphi presented it to them last week.
"Delphi's proposal is designed to hasten the dismantling of America's middle class by importing Third World wages to the United States," UAW President Ron Gettelfinger and Vice President Richard Shoemaker said in a joint statement.
The UAW represents most of Delphi's approximately 34,000 U.S. hourly workers.
Delphi Chairman and CEO Robert "Steve" Miller has said he understands workers are angry, but the company is paying wage and benefit packages worth $65 an hour, which is two to three times more than its competitors.
Miller has expressed optimism that a deal with Delphi's unions can be reached by mid-December. If an agreement to cut wages and benefits isn't reached, Delphi could ask the bankruptcy court to void its contracts. The court could then impose new contracts in the first part of next year.
Todd Jordan, 28, who works at a Delphi plant in Kokomo, said there is no way he and his wife, who also works for Delphi, could support their two children on the proposed wages.
"We're going to have to declare bankruptcy," Jordan said.
Yesterday in Dayton, Ohio, approximately 70 Delphi workers, local UAW leaders and city officials marched from a plant to a union hall to protest any possible plant closings. The Dayton area has five Delphi plants that employ 6,000 people.