Delphi restates wage package

Delphi Corp. can likely afford to pay its workers wages and benefits totaling $17 to $22 per hour, according to a document obtained by the Tribune.

An economist, however, questions the accuracy of the numbers.

David Bodkin, Delphi’s director of media relations and South America and Mexico corporate affairs, e-mailed the Tribune Friday a two-page benchmark comparison of wages at Delphi and what the company is saying its competitors pay.

Delphi’s 2005 estimated hourly cost per employee is $76.46 — about 3 1/2 times the competitive $17 to $22-an-hour range, according to the document.

The $76.46 cost includes $26.97 in base wage, $26.86 in wage-related/benefits costs and $22.63 in legacy costs.

A transformed Delphi, using the auto supplier’s Nov. 15 proposal, would pay an hourly rate of $21.33: a $12.50 base wage and $8.83 in benefits.

This would put Delphi in line with the costs of eight competitors, generically named “Supplier A” to “Supplier H” in the document.

The average wage listed in the document for competing companies is $11.91.

But Steven Szakaly, an economist with the Center for Automotive Research in Ann Arbor, Mich., said Friday the document “doesn’t appear to represent a true cross-section of Delphi’s competition.”

Szakaly said the Delphi numbers compare what would likely be starting competitor wages against wages of Delphi workers with at least 25 years.

“It looks highly selective,” he said.

Szakaly pointed out the document says assemblers in the South make $16.13 an hour, compared to $12.83 for assemblers in the Midwest.

“I don’t get how those in the south are making more than people in the north,” he said.

Delphi has proposed cutting production workers’ hourly wages from about $27 to between $10 and $12.50.

Leaders of the United Auto Workers union have blasted that offer as “insulting.”

UAW Vice President Richard Shoemaker told Delphi union officials Thursday that although he is encouraged by participation from General Motors Corp., Delphi’s demands still might force the union to strike, The Detroit News reported.

The UAW conducted informational picketing this week at all Delphi U.S. facilities against Delphi’s Key Employment Compensation Programs.

In Kokomo, workers picketed from about 11 a.m. to 3:30 p.m. at the parking lot entrances of Delphi Electronics & Safety. A labor rally is planned for 2 p.m. Dec. 10 in Kokomo’s Johanning Civic Center.

Delphi is Indiana’s third largest industrial employer.

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

UAW President Ron Gettelfinger blasted the KECP on the UAW’s Web site as an “obscene pay for failure plan.”

Gettelfinger said the first wage proposal presented by Delphi CEO Steve Miller — a base rate of $9.50 an hour for ‘low production’ workers — works out to $19,760 a year, barely above the U.S. poverty level of $19,197 for a family of four.

“If Miller’s vision of America’s future gains wider acceptance by corporate and government leaders, we’re all in deep trouble because his vision is an America sharply divided between a super-rich elite and the working poor, with no middle class as we know it today,” Gettelfinger wrote.

Szakaly said offering $9.50 an hour “causes a lot of deep-seeded resentment” among union rank-and-file — leading to difficult negotiations and “this sort of brinkmanship.”

“I don’t think the union under any circumstances would take $12.50 an hour,” he said. “I don’t think it’s acceptable to go from middle class to poverty level.”

Delphi, the nation’s largest auto supplier, filed for Chapter 11 bankruptcy reorganization Oct. 8, citing globally uncompetitive costs.

The Troy, Mich.-based company spun off of GM in 1999. Although Delphi has diversified its customer base, GM remains its largest customer.

It is uncertain how much financial liability GM has to Delphi, with observers giving a range from zero to $12 billion.

Bodkin said Delphi remains committed to contract discussions with the other parties.

Tension is undeniably running high, so is there still hope for compromise?

Analyst Mike Chung of Edmunds.com said Thursday the entire automotive industry is “holding its breath” waiting to see how the Delphi situation plays out. He said manufacturers are in a cost-cutting mode because it looks like lean years ahead.

Szakaly sees hope for Delphi. He said Delphi’s announcement it was postponing its plan to file in federal court to throw out its union contract makes a deal appear more likely.

GM chipping in $6 or $7 an hour to help Delphi with costs is “one of the viable solutions,” Szakaly said.

Analysts in the Michigan and California offices of AutoPacific were unavailable Friday.

The Associated Press contributed to this report.