More bribes for the UAW
GM to take back 5 Delphi plants, contract details show
May 26, 2009 - 4:18 pm ET
UPDATED: 5/26/09 5:38 p.m.ET
DETROIT -- General Motors has agreed to assume ownership of five Delphi
Corp. plants in the United States and operate the UAW-manned factories
as a wholly owned subsidiary, according to union highlights of the
tentative new contract between GM and the UAW.
The plants are Delphi Saginaw Steering in Saginaw, Mich.; Delphi Thermal
Systems in Lockport, N.Y.; Delphi Powertrain in Rochester, N.Y.; Delphi
Powertrain Systems in Grand Rapids, Mich.; and Delphi Electronics and
Safety in Kokomo, Ind.
The GM subsidiary will employ all UAW-represented workers at the plants
under the current Delphi labor agreement there, according to the
highlight book that the UAW intends to share with the GM rank and file
this week as the union pushes for ratification of the contract concessions.
Those concessions were regarded as necessary by GM and the U.S. Treasury
Department for the automaker to restructure its costs and continue to
receive federal loans that now total $19.4 billion.
Union leaders from GM locals today unanimously endorsed the tentative
pact for ratification, the UAW said in a statement.
GM faces a probable bankruptcy filing by Monday after failing to
negotiate the restructuring of $27 billion in bond debt.
A GM spokesman declined to comment on the Delphi agreement. A spokesman
for the UAW could not be immediately reached for comment. Delphi filed
for Chapter 11 protection in October 2005.
Delphi spokesman Lindsey Williams said announcing the deal is premature.
Any agreement regarding Delphi assets is subject to approval by lenders
who have loaned money to Delphi in bankruptcy as well as approval by the
court, he said.
He declined to discuss any of the plants except Delphi Saginaw Steering,
which GM agreed to take back from Delphi.
The White House automotive task force, however, put a hold on the deal
until it could evaluate how the plant fits with Delphi's longer-term
strategy to emerge from Chapter 11. A hearing on Delphi's restructuring
is scheduled on May 29 in New York bankruptcy court.
The Delphi workers at the five plants took concessions several months
ago as part of the company's bankruptcy restructuring. The parts
supplier, which was spun out of GM in 1999, has been unable to emerge
from Chapter 11 because of a lack of exit financing.
UAW membership at the plants is slightly more than 10,000, compared with
more than 30,000 when Delphi entered Chapter 11 protection.
GM's move to take back the Delphi plants is similar to measures taken in
2005 by Ford Motor Co. to take back about 20 former Visteon Corp. plants
and operations. Ford has been selling, closing or restructuring those
operations ever since.