Clock is ticking at Delphi

Four weeks remain for Delphi Corp. to reach a contract agreement with the United Auto Workers union, but the sides remain far apart.

“I see the parties as being irreconcilable,” said Jim Hossack, vice president of California-based consulting firm AutoPacific.

Delphi’s latest offer Wednesday was blasted by UAW President Ron Gettelfinger as “ridiculous.”

Delphi said it would pay workers base wages of between $10 and $12.50 an hour.

“This proposal results in a wage and benefit package costs of more than $21 per hour, placing Delphi in a competitive base pay and benefit range with its U.S. unionized and nonunionized competitors,” Delphi said.

“We believe the focus of the discussions should move toward a solution, given that the transformation needs facing Delphi have been well defined.”

Workers attending the monthly meeting at UAW Local 292 headquarters in Kokomo Thursday, shared Gettelfinger’s sentiment.

“People are just voicing their opinion on how they feel, and there’s a lot of frustration,” 292 president Sona Camp said. “But we’re all in this together, we’re all fighting for the same cause and it’s not over yet.”

“People speak about the dollars and cents of the benefit package, but there’s also a principle involved,” member Eric Gulmire said outside the meeting. “You can either stand up for what you believe, or you can lie there and take it.”

High stakes

If a contract agreement isn’t reached by Dec. 16, Delphi would likely begin the legal process of voiding the current agreement.

Delphi could file two motions Dec. 16 — one to reject its collective bargaining agreement and a second to modify its retiree health care benefits.

The UAW would have to file its opposing motions by Jan. 11.

Hearings on the motions would begin in federal bankruptcy court in New York City Jan. 24.

The court must issue a ruling on Delphi’s contract within 30 days of the hearings, according to the UAW.

If the court throws out the collective bargaining agreement, the union has the legal right to strike.

Gettelfinger has said Delphi is not serious about negotiating in good faith, and Wednesday, described bargaining with Delphi as “more like a dictatorship.”

Kokomo Delphi worker Betty Stahl said many employees see a strike as preferable to the company’s wage cuts.

“Twelve dollars an hour? There’s people at Chili’s [restaurant] making $12 an hour. Of course, that will stop as well if we go down,” Stahl said. “It’s scary. I’ve got 33 1/2 years in, and what they’re trying to do to the retirees is asinine. There’s really a lot of bad decisions that have been made, and they haven’t been made by [the workers].”

Strike talk has been circulating for days, given the lack of progress in negotiations.

Local 292 member Bob Steiner said unity among union members has become crucial as more members become convinced the company isn’t bargaining in good faith. Steiner said he was unhappy with the media coverage of a Nov. 12 meeting of workers who disapprove of the UAW leadership.

“[Delphi CEO Steve] Miller’s objective is to break the union and if the union fractures along those lines ... I don’t want other powers to facilitate that happening,” Steiner said. “Let’s listen to what [union] leadership has to say.”

So goes GM?

Workers at Thursday’s Local 292 meeting were given a primer on the way bankruptcy law works by UAW attorney Barry Macey, including information on the compensation package proposed for Delphi’s top executives, if and when a reorganization occurs.

According to a story in the New York Times Sunday, Delphi’s top 600 executives could control 10 percent of the stock issued by a reorganized Delphi. The top 500 employees would split an additional $88 million in cash.

Camp said there were numerous questions at the meeting about how the bankruptcy laws “can be so unfair to hourly workers.”

Discussions also centered on how recent concessions might affect the roughly 5,000 General Motors Corp. retirees living in Kokomo. Delphi was spun off from GM in 1999.

Under the terms of the agreement, which was ratified by active GM union members last week, single retirees would pay a maximum out-of-pocket of $370 a year for health insurance; family plans would have a maximum out-of-pocket of $752 a month, she said.

That agreement, however, won’t take effect immediately, and much still depends on what happens with Delphi.

Hossack said a strike at Delphi could bring down both Delphi and GM.

Miller “is going to call it pretty darn straight” in negotiations, Hossack said.

“This is a historic moment in American industrial history,” said Hossack. “If we lose Delphi, it won’t open [federal officials’] eyes. If we lose GM, it will open their eyes.”

Making U.S. manufacturing globally competitive would entail revamping the nation’s health care system, pension system, financial system and legal liability, Hossack said.

“If the jobs have to go overseas ... they’re going to,” he said. “Boy, what a shame for America.”

Analysts with Center for Automotive Research in Ann Arbor, Mich., were unavailable.

Background

Delphi filed for Chapter 11 reorganization Oct. 8, citing globally uncompetitive labor costs.

Court proceedings began last month.

Delphi, the nation’s largest auto supplier, is based in Troy, Mich. It employs about 185,000 workers in six divisions in about 40 countries.

Kokomo is the world divisional headquarters of Delphi Electronics & Safety and home to about 5,200 of its approximately 29,900 employees.

GM remains the supplier’s largest customer since the spinoff.

It is uncertain what legal liability GM has to Delphi; it could be anywhere from zero to more than $10 billion, observers have said.

Although Delphi has sought to diversify its customer base, its ties to GM remain strong.

GM has been hurt by foreign competition and declining SUV sales and Delphi has felt the effects of that declining market share.

Last month, Delphi angered union workers with its initial wage and benefits proposal, which would slash hourly wages by more than 60 percent.

Kokomo hourly workers now make $24 to $27 an hour, about double that with benefits.

The Associated Press contributed to this report