Delphi Sets Final UAW Deadline

February 19, 2006

Can GM Turn Itself Around? by TCC Team (2/19/2006)
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GM-UAW-Delphi Stuck in Neutral by Joseph Szczesny (2/16/2006)
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The bankrupt Delphi Corp. has once again delayed confrontation over the company’s expensive labor contracts. However,Delphi has imposed what officials described as a hard deadline at the end of March on contract talks with the United Auto Workers and other unions.

Delphi officials said they were hopeful the three-way discussions, involving General Motors and the UAW will produce an accord by March 30. However, without an agreement, Delphi will have no choice but to seek help from bankruptcy court in canceling the contracts, the company said.

Robert “Steve” Miller, Delphi Chairman and chief executive, said he wanted to reach an agreement with the unions and without court intervention. But Miller also has said Delphi, which is GM’s largest supplier, is not competitive paying the kind of wages and benefits mandated by its current labor pacts.

“While major obstacles and difficult issues remain to be resolved, the discussions to date with GM and our major unions helped frame the concerns and objectives of each organization,” Miller said in statement.

“As we have said before, we remain committed to reaching a consensual agreement. This deadline should provide us sufficient time to deal with the complexities inherent in fashioning practical and workable solutions, and an effective agreement that works for all of us," Miller added.

Richard Wagoner told reporters after a speech in Miami that he welcomed Delphi’s decision but indicated there is no guarantee that the discussions will produce an agreement.

Strike looming


Claudia Piccinin, Delphi spokeswoman, said this is the first time since filing for bankruptcy back in October that it had set a deadline for taking action on the labor contracts. If there is no contract by March 30, Delphi’s attorneys will appear in court the very next day asking for relief, she said. As a practical matter, the bankruptcy judge is likely to order more discussions — but Delphi can show it is losing more than $250 million per month under the current agreements.

“That’s definitely the deadline. This the first time we’re a setting a hard deadline,” she said.

UAW President Ron Gettelfinger and vice president Richard Shoemaker, who directs the union’s General Motors and Delphi departments, said again they believed the best places to resolve Delphi’s problems is at the bargaining table.

“We have said consistently that the only basis of finding satisfactory resolution to these matters is through the use of the collective bargaining process with Delphi, GM, and the UAW at the bargaining table. In recent weeks the parties have held several such meetings,” Gettelfinger and Shoemaker said in statement.

Delphi Corp.’s second largest union, the International Union of Electrical Workers-Communications Workers of America (IUE-CWA), has scheduled a strike vote next month among its members, adding to the tensions around the talks. Officials of the IUE-CWA, which represents more than 6000 Delphi production workers, said they planned to go ahead with the strike vote on March 12. The UAW has not scheduled a strike vote.

Analysts were divided over whether the discussions will break the current impasse. “The decision to delay is indicative of progress in ongoing talks between Delphi, GM, and the UAW, increasing the likelihood that a protracted strike will be avoided,” JPMorgan analyst Himanushu Patel said in a note to investors. Ron Tadross of Bank of America, however, said he believed confrontation was unavoidable.

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