Workers: UAW got best deal
But concessions at Delphi were significant, could hint at sacrifices to
come in Big Three talks.
FLINT -- Delphi Corp. worker Darrell Snell felt months of stress and
worry slip away as he left his union hall on Monday after learning
details of a landmark wage deal between the parts supplier and the
United Auto Workers.
"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
"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
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,"
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
"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
Gettelfinger weighed in on the deal for the first time Monday, crediting
GM with brokering the agreement while continuing to criticize Delphi
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.