GM-UAW-Delphi Stuck in Neutral

February 16, 2006

The three-way talks between General Motors Corp., the United Auto Workers and the bankrupt Delphi Corp. appear to be stuck in neutral.


Today will be a pivotal day in the talks, though, as a Feb. 17 deadline thatDelphi nominally set for filing court motions to have its current labor pact with the UAW set aside passes. The betting is that Delphi will not file the motion as long as the tenor of the talks remains hopeful. Otherwise, Delphi runs the risk of provoking a crisis that could lead to a showdown, union officials have warned.

Claudia Piccinin, Delphi spokeswoman, said that the Feb. 17 date was not a hard-and-fast deadline and the company’s preference was to let the negotiations move forward.

Delphi said in December it was withdrawing its previous contract proposals and planned to give negotiations time to work. The earliest the company would consider asking the bankruptcy judge to set aside Delphi’s contracts with the UAW and other unions was Feb. 17.
Robert “Steve” Miller, Delphi’s tough-talking chief executive officer, said last month that the bankrupt supplier was prepared to give the three-way negotiations with GM and the UAW time to work.

Meanwhile, Richard Shoemaker, the UAW’s top negotiator in the discussions with GM and Delphi , said the differences were substantial and difficult to overcome. “The differences between the parties are huge. They’re not minor differences. They’re not small differences. They’re huge differences,” he said during the UAW’s political conference in Washington D.C.  


He also reiterated the union position that if the bankruptcy judge throws out the current agreement, Delphi’s unions will strike. “If the court rejects our agreement and Delphi imposes its last proposal, it will probably be impossible to avoid a long strike,” Shoemaker said.

Making a complex agreement


The negotiations are complicated. Currently the UAW estimates there are more than 18,000 Delphi workers who are eligible to claim a job or "flow-back" into GM's manufacturing operations under the union's existing contract with both companies.

The flowback basically means that as part of the settlement, GM will have to agree to add workers to its payroll at a time when it has committed to cutting the size of its workforce. One possible solution is offer buyouts directly to GM workers who are near or past their nominal retirement dates. More than 40 percent of GM’s current workforce is close to retirement, according to estimates by the Center For Automotive Research in Ann Arbor.

The UAW estimates that 7520 Delphi workers have now applied to go back to GM. In 2005, GM took back only 700 Delphi workers — leading to a huge pile-up of underemployed workers in the job bank, which Delphi estimates has already cost more than $400 million.

Most of the commentary around the negotiations has focused on the need to come up with a formula that will encourage thousands of employees to retire early. But it also appears with the economy changing rapidly and the promises involving retirement benefits being shredded daily, many GM employees are more reluctant to leave.

Bob King, the UAW vice president in charge of the parts department, said last week that while the union is willing to help companies in distress, it also wants to see companies make major investments that will keep jobs in the United States.

Ron Gettelfinger, the UAW president, also said in an interview on WJR AM radio in Detroit that he will defend the job bank. Designed two decades ago to be a way station for workers displaced by restructuring while they waited for other jobs to open up, the job bank was not conceived as a permanent unemployment benefit.

Gettelfinger also attacked GM and Ford during the union’s political conference. “The GM and Ford restructurings were extremely disappointing,” Gettelfinger said of the recent announcements by the two Detroit-based giants that together, intend to close more than a dozen factories and eliminate more than 60,000 jobs over the next three years.

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