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Delphi Reaches Labor Deal, Moving It Closer to Exiting Bankruptcy

AP
Monday, 6 Aug 2007 | 9:45 AM ET

Delphi said Monday it tentatively agreed to contracts with four more unions, including one that recently warned a strike was possible if talks stalled.

With the agreements, the auto parts maker continues to make progress on its emergence from bankruptcy protection.

"This series of tentative labor agreements demonstrates Delphi's continued commitment to achieving a consensual resolution with all parties in its Chapter 11 cases," John Sheehan, Delphi's chief restructuring officer, said in a statement.

"We believe these agreements, if ratified, provide additional traction towards our emergence."

Delphi and the International Union of Electronic Workers-Communications Workers of America reached a four-year contract about 10 p.m. Sunday, the union said in a news release Sunday.

The Communications Workers' industrial branch said its members will hold a ratification vote by mail. The union represents about 2,000 Delphi employees.

"We have provided significant and meaningful options for our members as they strive to survive this difficult period," said Jim Clark, president of IUE-CWA. "Our local leaders who make up the National Bargaining Committee made the best out of what was a deplorable situation."

Along with the IUE-CWA, Delphi said Monday it reached pacts with the International Association of Machinists, the International Brotherhood of Electrical Workers and the International Union of Operating Engineers.

Delphi didn't release details, but said the deals include issues of work force transition and legacy pension items. The agreements are subject to union ratification and approval by bankruptcy court.
Troy-based Delphi is the former parts division of General Motors , which spun it off in 1999. Delphi struggled on its own and entered bankruptcy protection in October 2005.

Delphi has said it needs to pay lower wages and get other concessions from its unions to compete against suppliers with cheaper labor costs.

The company recently secured wage cuts from the United Auto Workers, its largest union, representing about 16,000 Delphi employees. The Delphi-UAW deal slashes wages for longtime workers from $27 per hour to a range of $14 to $18.50 an hour.

Delphi leaders say they hope to emerge from bankruptcy by the end of the year.

On Thursday, a bankruptcy court agreed to let Appaloosa Management LP and other investors inject up to $2.55 billion into Delphi.

The agreement with the IUE-CWA includes "an array of choices ranging from retirement options to buyouts and buy downs that allow our members to make the best decision for themselves and their families," Clark said.

On July 20, the union said it planned to terminate its contracts, a first step toward a possible strike in October.

The IUE-CWA has workers at three plants that Delphi plans to keep -- including Warren, Ohio, and Brookhaven and Clinton, Miss. -- as well as at three the company plans to sell or close, including Kettering and Moraine, Ohio, and Gadsden, Ala.

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