UAW to push Delphi wage deal
The United Auto Workers will dispatch national leaders to Delphi Corp.
union locals across the country beginning today as the UAW launches a
weeklong effort to convince its members that a landmark wage and
benefits deal struck Friday is in their best interests.
The presidents of several UAW locals, the top union officials at the
plant level, are optimistic that their members will sign off on the
deal, which offers workers from the former General Motors Corp.
subsidiary a cash payout and other compensation in exchange for leaving
the company or accepting lower wages.
But in the wake of the high sensitivity that has surrounded Delphi since
the parts supplier filed for Chapter 11 bankruptcy nearly two years ago,
union representatives will spend days going over details with workers
and answering questions before bringing the agreement to a vote.
National UAW leaders from both Delphi and GM are expected to participate.
"This is orders of magnitude better than what Delphi first offered,"
said Harley Shaiken, a labor professor at the University of
California-Berkeley, comparing the wage deal to a pair of proposals shot
down earlier by the UAW. "There may be some angry workers out there, but
the UAW members at Delphi know the score."
A tentative agreement between the UAW, Delphi and GM was reached Friday
after months of tense and sometimes openly hostile negotiations.
It includes a total payout of $105,000 over three years that will be
offered to about 4,000 of Delphi's 17,000 UAW workers. In return, the
workers' pay will be cut from about $27 an hour to a maximum of $18.50
an hour by Oct. 1, according to a copy of the agreement posted online by
a dissident union group.
Supplemental and temporary employees who leave the company will get
severance pay of $1,500 for every month worked, up to $40,000.
In a win for the UAW, Delphi would shutter four fewer plans than
originally planned. The company plans to keep open plants in Grand
Rapids; Kokomo, Ind.; and Lockport and Rochester in New York. Delphi
plans to sell a plant in Adrian, along with the Saginaw Steering plant
in Saginaw; its Sandusky, Ohio, factory and a plant in Cottondale, Ala.
Three factories -- Flint East, Saginaw Manufacturing and a site in
Dayton, Ohio, will be turned over to GM or a third party designated by
GM. At least 10 factories will close, including one in Coopersville, Mich.
The deal, reached almost exactly a month before the official start of
national contract talks between GM and the UAW, was needed to eliminate
the threat of a strike at Delphi that would have disrupted those
negotiations and crippled GM, Delphi's largest customer.
If passed by members, the deal would allow Delphi to reduce its overhead
substantially in a bid to compete with lower-cost international suppliers.
At one local, in Wyoming near Grand Rapids, officials will hold three
meetings with members throughout the week before calling for a vote on
Thursday. Local 651 in Flint will begin talking with members today.
Another Delphi unit in Oak Creek, Wis., where virtually all the workers
are temporary hires signed on to replace retirees who left with last
year's mass buyout offer, will vote on Wednesday.
Skip Dziedzic, president of UAW Local 1866, which represents the workers
in Oak Creek, said many of the workers at the soon-to-be shuttered plant
have been distraught in recent months as Delphi has begun removing
equipment from the factory in preparation for the plant's year-end closure.
"A lot of folks didn't think they were going to get anything, and now
people are going to get opportunities they didn't think they'd have,"
Dziedzic said. "I'm pretty sure they're going to vote yes."
Delphi is in talks with competing private-equity groups that want to buy
the company. The groups are led by Appaloosa Management LP and Highland
Capital Management LP.
GM said in a May 24 filing it expects retirement costs for former GM
workers at Delphi to total $7 billion. In addition, after an initial
payment of $500 million, the automaker said it will have continuing
labor-related costs of $300 million to $400 million annually for an
unspecified time and "transitional" payments of another $100 million.
Highlights of the deal
# High-seniority workers would get $35,000 cash annually for three years
for taking a wage cut from $27 an hour to $18.50.
# Higher paid skilled-trades workers would get $10,000.
# Health benefits for veteran Delphi workers will be changed to match
those of newer hires, which include higher out-of-pocket costs.
# Employees with 10 or more years can take a $140,000 buyout. Those with
less than 10 years get $70,000.
# Eligible workers who retire can get $35,000. A pre-retirement program
will be available for those with at least 26 years of service but fewer
than 30 years as of Sept. 1.
# Workers at least 50 with10 years of service can get retirement
benefits if they leave Delphi.
# Supplemental and temporary employees who leave will get severance of
up to $40,000, depending on length of service.
# Delphi will keep four plants, close at least 10, sell four and turn
three over to GM.