Delphi CEO Hopes for No Strike

April 3, 2006

 

 

 

 

Delphi Asks Court to Toss Contracts by Joseph Szczesny (4/3/2006)
Supplier plots new course — and asks the judge to turn it that way.

 

GM Says Turnaround Gaining by Joseph Szczesny (4/3/2006)
A week of financial news could contain the seeds of recovery.

 

Delphi Corp. believes it can restructure and reduce the wages of its workers without a nasty strike, says the company’s top executive, Robert “Steve” Miller.

Miller also said it was too soon to write off the domestic auto industry as a failed enterprise and predicted it will emerge from its troubles a stronger and healthier one just like the U.S. steel industry did earlier in the decade.

“Don’t go making funeral arrangements just yet for America’s auto industry. Yes, it’s about to go through some wrenching changes. There will be plenty of heartache and hard work. But there is a wealth of capable leadership in our industry, including its labor leaders, that can bring about a promising future,” Miller said.

However, he also stressed that Delphi needs a competitive wages and benefits package from its unions and insisted that he is not asking for anything that the UAW and other unions haven’t given other suppliers in the U.S. with whom Delphi now competes, he said. 

Delphi is essentially a ‘Tale of Two Cities,’ a bimodal company that represents all that is great and all at the same time, all that is troublesome in our automotive industry,” said Miller.

Delphi filed petitions last week asking a bankruptcy judge in New York to cancel the company’s labor contracts with the United Auto Workers and five other unions, setting in motion a possible showdown with its unions and its largest customer, General Motors Corp. The company also sketched out a restructuring plan that calls for the sale or closure of 21 of 29 manufacturing sites the company now operates in the United States.

Representatives of Delphi’s key unions quickly ripped into the proposal and the UAW has basically shut down discussions with the company for now.

Miller, however, said Delphi has no choice but to rewrite its expensive labor contracts.

“We cannot keep talking and losing money indefinitely,” said Miller, who added that the time built into the bankruptcy procedures could help move both sides toward some kind of solution.

Miller, however, said that the court petition was one way to keep the negotiations with company’s union moving forward and predicted the company would eventually succeed in re-negotiating all of its labor contracts.

“Despite the negative views expressed by some, we see the filings as a means to keep the process going. Think of it more as an insurance policy. It’s something you need to have but hope you’ll never use.

“Our duty as the management and the board of directors at Delphi is to protect the value of the estate. That requires that we take the steps necessary to halt the losses we are continuing to incur, amounting to more than a billion dollars in losses just since October.

“We’ve got a couple of months to work things out. That’s plenty of time if everyone continues with the same good constructive spirit as we have seen in these past few months. And even if that time runs out, and even if we get a court ruling permitting us to reject our labor contract, there is no mandate for us to act unilaterally. We would assess the situation at that time, and continue to seek a consensual resolution if we believe such an outcome is achievable,” Miller added.

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