How will Delphi’s white-collar cuts affect Kokomo?

It’s uncertain how this area will be affected by Delphi Corp.’s plan to cut its white-collar work force, but industry expert David Cole expects Kokomo to fare comparatively well.

“Kokomo is a keeper, and they want to build on that, so I think, proportionately, there would be less of an impact there,” said Cole, chairman of Center for Automotive Research in Ann Arbor, Mich.

Delphi said March 31 it expects to reduce its global salaried work force by as many as 8,500 employees, about 25 percent, as part of its transformation plan.

Troy, Mich.-based Delphi has 185,000 workers in six divisions worldwide. The company said up to 40 percent of its current corporate officer positions will ultimately be eliminated.

Kokomo is world headquarters of Delphi’s Electronics & Safety division and home to 5,200 of the division’s 29,900 workers. About 2,300 of Kokomo Delphi workers — less than half — are union members.

Delphi plans to focus on core product lines, shedding less profitable lines and facilities. It listed Kokomo in its transformation plan as one of eight core U.S. automotive facilities.

Company spokeswoman Claudia Piccinin said Thursday that Delphi has not set a target date for a salaried reduction and it’s too early to speculate on how the cuts will work — whether by global region, or by individual U.S. plants.

“We’ll certainly roll it out internally as soon as we have information for our employees,” she said.

Cole said the most vulnerable facilities are those targeted for closing. For facilities it wants to sell, Delphi will need to negotiate white-collar cuts with the buyer, he said.

Piccinin said profitable product lines in “noncore” facilities will generally be transferred to core facilities, but it is premature to speculate on whether nonunion workers from other facilities would be transferred to Kokomo.

“The fate of the worker is not necessarily the fate of the facility,” she said.

Cole said he expects Kokomo’s operations to get white-collar workers from facilities closing as part of a consolidation.

Craig Dunn of Kokomo’s Liberty Financial Group said Thursday the city’s value to Delphi should go a long way to preserving its white-collar ranks.

“I feel pretty optimistic,” Dunn said. “My general impression is that Kokomo employment should stay intact where it is, or increase.”

Like Cole, Dunn said he thinks Delphi “would cherry pick and carve out some of the [profitable] pieces and relocate them” to places like Kokomo.

Dunn said the sacrifices of white-collar employees has been an overlooked aspect of the reorganization.

“Some of these people have not had a wage increase for a long time,” he said. “It is an untold story.”

Mayor Matt McKillip said he hasn’t spoken with Delphi officials about salaried cuts, but he expects Kokomo to fare comparatively well.

Cole said the international dimension of those cuts is difficult to gauge because “it’s a very complex issue when you start juggling people on a global basis.”

However, Cole said he would expect some salaried cuts to come from western Europe, but not Asia, where Delphi has a young work force. He noted that cutting positions in Europe is a complicated matter because of the legal framework of many European countries.

Dunn said he expects most of Delphi’s white-collar cuts to come from the United States. He said Delphi wants to replace older salaried employees with younger workers at a lower wage.

Delphi filed for Chapter 11 bankruptcy reorganization Oct. 8, citing globally uncompetitive costs. It expects to emerge from Chapter 11 in 2007.

Delphi has been in negotiations with GM and the United Auto Workers union.

The UAW has blasted Delphi’s latest wage and benefits offer, which would gradually reduce the pay of hourly workers from $27 to $16.50 an hour.

The company has asked bankruptcy Judge Robert Drain to throw out its union contracts. Negotiations are expected to continue ahead of a May 9 hearing. Drain’s decision isn’t expected until June.

If the judge terminates the contracts and Delphi imposes its latest wage offer, the UAW has said it will strike.

Analysts are divided on the possibility of a strike, saying it would be catastrophic to each party and significantly affect the entire industry.