Delphi Uses Court System to End-Run Workers

by James Parks, May 10, 2006

Delphi is trying to use the bankruptcy process to get what it could not get at the bargaining table.

Yesterday, the nation’s largest auto part supplier asked a New York bankruptcy court to invalidate its contracts with the UAW and the IUE-Communications Workers of America and to impose deep wage and benefit cuts the workers had already rejected during contract talks.

Although Delphi executives claim the cuts are necessary to remain competitive, they refuse to provide the financial records that would prove their argument. Fifty-five members of the House and 25 senators recently wrote to Delphi CEO Steve Miller, asking him to provide complete and current financial information to workers, retirees and communities, and to explain why the company’s proposed wage and benefit cuts are necessary.

Delphi filed for bankruptcy in October and immediately began calling for concessions, but failed to reach an agreement with the unions. Like many other companies in recent months, Delphi then turned to the bankruptcy court to renege on its collective bargaining contracts and to cut costs by squeezing pay and pensions.

The company’s last offer to the 33,000 workers in late March included a proposed cut in wages from $28 an hour to $16.50 an hour by September 2007. The workers would receive a $50,000 bonus for accepting the concessions—if Delphi’s former owner, General Motors, agrees to put up the money for the bonuses. As of yesterday, GM had not agreed to do that, union lawyers said.

The IUE-CWA members have given their leaders authorization to call a strike if necessary, and UAW members are voting on authorization. A strike could shut down Delphi and impact production at GM, Delphi’s largest customer.

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