Workers: UAW got best deal But concessions at Delphi were significant, could hint at sacrifices to come in Big Three talks.
"I've got a job," the 24-year-old from Mount Morris said with a slight grin. "I can move on with my life. Makes me feel good about the union."
Like many workers at the Flint Delphi East plant -- one of four saved from closure under the deal -- Snell sees the agreement as a sign of the UAW's enduring strength in tough times.In that sense, the tentative deal is a victory of sorts for the UAW because the concessions were not as deep as many had feared given Delphi's bankruptcy. But the givebacks were significant and could foreshadow the sacrifices workers will be asked to make when the UAW negotiates new national contracts this summer with Detroit's Big Three automakers.
"The Delphi agreement will be the lens through which the companies will view the national contracts," said auto analyst John Casesa of the Casesa Shapiro Group. "That doesn't mean it will be easy to get concessions from the union. It shows a union that is willing to be more flexible than people expected."
Under the agreement reached Friday among the UAW, Delphi and General Motors Corp., the supplier's former parent, Delphi workers will get cash payouts and other compensation in exchange for leaving the company or accepting significantly lower wages.
For many, the reductions will be drastic, more than $10 an hour in pay along with scaled back health benefits. And workers who started with the company decades ago when it was part of GM will make wages similar to those earned by relative newcomers.
The deal, which still must be ratified by union members, was needed to avert the threat of a strike at Delphi that would have crippled GM, Delphi's largest customer, and disrupted the coming labor talks.
With the agreement, which paves the way for Delphi to emerge from bankruptcy, at least one Wall Street analyst is predicting the union will also grant major concessions to automakers.
GM shares climbed 81 cents, or 2.3 percent, Monday on the New York Stock Exchange after Goldman Sachs analyst Robert Berry raised his rating on the automaker to "buy" from "neutral," largely on the belief that the UAW will give concessions beyond what investors were expecting.
"We suspect members and retirees are increasingly amenable to," wage and benefit cuts, Berry said in a research note without mentioning Delphi. "We think that translates into progress on health care costs, work rules, and potentially on wages in 2007 union talks."
Others say not so fast.
Harley Shaiken, a labor expert at the University of California, Berkeley, said the UAW's ability to hold ground against Delphi signals that the union will have clout when it deals with the automakers.
Terms of the Delphi deal were far better than the company's earlier offers, which at one point included cutting wages to $9 an hour. The cash payments are significant as well, including $105,000 to be paid over three years to about 4,000 high-seniority workers in exchange for accepting lower hourly wages. There also are generous cash retirement incentives.
"This (Delphi) deal shows the UAW remains very powerful even in a very tough situation," said Shaiken, who has maintained that the union's power remains formidable -- and often underestimated -- in an industry where labor-management cooperation is critical to both sides.
"Reports of the death of the UAW have been greatly exaggerated," Shaiken quipped.
Even with the concessions, many workers said they were pleased with the way union leaders handled the deal.
"This shows the union still has power and that it still protects its workers," said 20-year Flint East worker Tammy Scofield.
"It would have been a lot worse if it was decided in bankruptcy court," she said.
Jeff Reno, a worker at the Saginaw Steering Systems plant, which is set to be sold, thinks the deal hurts more senior workers by cutting their pay about 40 percent. But despite his gripes, and his plans to vote against the deal, Reno still feels the UAW did the best it could in a tough situation.
"I don't think the union had much of a chance given the environment," said Reno, 33, of Kawkawlin.
Workers' relief, in part, reflects a masterful job by UAW President Ron Gettelfinger in managing the expectations of the rank and file, analyst Casesa said.
Gettelfinger weighed in on the deal for the first time Monday, crediting GM with brokering the agreement while continuing to criticize Delphi leaders.
He said Delphi focused only on extending the bankruptcy and turning Delphi into a foreign company.
"If it weren't for (GM Chief Financial Officer) Fritz Henderson and his team ... this agreement never would have come about," Gettelfinger told NewsTalk-760 WJR's Paul W. Smith.