Delphi Corporation last night (10 August) said a bankruptcy court hearing scheduled for today to scrap existing union contracts had been postponed to 17 August to allow for more discussions between the company, its unions, General Motors and other parties.
Go deeper with GlobalData
“Delphi today requested a short-term extension of the recess of the [Section] 1113/1114 [motion] hearing until 17 August, 2006. The request was made following a chambers conference conducted by the Bankruptcy Court [on] 9 August and meetings between Delphi and its major stakeholders held over the last several days,” Delphi said in a statement.
“The additional adjournment is intended to facilitate continuing discussions with the UAW, IUE-CWA, USW and other unions as well as discussions with General Motors Corporation, Delphi’s statutory committees appointed in the Chapter 11 cases and other major stakeholders regarding Delphi’s transformation plan.”
Earlier on Thursday, General Motors chairman and chief executive Rick Wagoner predicted that complex negotiations between the parts supplier and its labour unions eventually would lead to a settlement on wage and benefit reductions, according to The Associated Press (AP).
Speaking at the Centre for Automotive Research Management briefing seminars in Traverse City, Michigan, Wagoner reportedly said, however, that an agreement would not be reached quickly: “I think we’re progressing, but it’s not going to come together in the next five minutes.”
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataAP noted that Troy, Michigan-based Delphi, GM’s largest parts supplier, entered Chapter 11 bankruptcy protection last October and is seeking court permission to void its labour contracts and impose lower wages.
The talks, Wagoner told AP, are complex, involving GM, Delphi, multiple unions, creditors and investors.
“It’s not the kind of thing in my view that we’re going to be able to just, all of the sudden – voila – bring this together in a very, very short term,” he said.
But Wagoner told the news agency he is confident that an agreement will be reached, avoiding a strike that could be catastrophic to GM.
“It would be Russian Roulette on anybody’s part not to do that,” he said.
Delphi spokesman Lindsey Williams had told AP earlier on Thursday that talks were continuing with hopes of reaching an agreement before the court hearing, but would not say whether an agreement was close.
“At this point we do not have a comprehensive agreement,” Williams said.
The Associated Press noted that, last month, UAW president Ron Gettelfinger said negotiations had slowed and raised the possibility of a strike.
US bankruptcy judge Robert Drain in New York has said he would rule on Delphi’s wage-reduction request by 31 August while GM, Delphi and its unions all have said they would prefer a negotiated settlement, the report added.
