Delphi Unions Vote Strike, if Necessary

by James Parks, May 16, 2006

When federal bankruptcy court hearings resume May 24 on Delphi Corp.’s plan to throw out its union contracts, workers will have another weapon to protect their livelihoods. Over the weekend, UAW members at Delphi facilities voted overwhelmingly to authorize the union to call a strike should Delphi use its bankruptcy court proceedings to abrogate its union contracts.

The UAW issued this statement on May 16:

Members at 21 UAW-represented Delphi facilities voted overwhelmingly to authorize the International Union to call a strike should Delphi use its bankruptcy court proceedings to unilaterally impose changes to the UAW-Delphi collective bargaining agreements. Over 95 percent of the votes cast authorized the UAW to call a strike.

Members of the IUE-CWA already have given their leaders authorization to call a strike if necessary. The UAW and IUE-CWA together represent some 33,000 Delphi employees. A Delphi strike could affect Toyota Motor Corp., DaimlerChrysler AG’s Chrysler Group and other automakers who depend on Delphi parts. But it could paralyze General Motors Corp. (GM), Delphi’s largest customer and former owner. Analysts have said GM could lose up to $130 million a day during a strike.

The nation’s largest auto parts supplier seems to be preparing to force the workers out on strike by advertising for replacement workers across the country to work for $10–$14 per hour, half of what union workers make, in the event of a strike.

Delphi filed for bankruptcy in October and immediately began calling for concessions but failed to reach an agreement with the unions. The company’s last offer in late March included a $50,000 bonus for accepting the concessions—if GM agrees to put up the money for the bonuses. As of yet, GM had not agreed to do that, union lawyers say.

But while demanding concessions from workers, Delphi executives will share $98 million in bonuses this year and paid for lavish cruises for executives. The bonuses reinforce the fact that Delphi is using the bankruptcy process to impose deep wage and benefit cuts the workers had already rejected during contract talks, union leaders say. Like many other companies in recent months, Delphi declared bankruptcy to renege on its collective bargaining contracts and to cut costs by squeezing pay and pensions. The company showed its true colors by trying to exploit the current law by excluding profitable overseas operations and investments from consideration in the bankruptcy process.

Although Delphi executives claim the cuts are necessary to remain competitive, they refuse to give union leaders the financial records. Fifty-five members of the House and 25 senators recently wrote to Delphi CEO Robert “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.

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