The United Auto Workers (UAW) union has rejected a pay offer from bankrupt components supplier Delphi, a top union official told a news agency late on Wednesday.
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The union has been holding a bargaining convention in Detroit this week ahead of new wage round negotiations with the US-based ‘big three’ car makers starting later this year.
Vice president Cal Rapson, who heads negotiations with Delphi, told the Associated Press (AP) that the offer was “insulting.” It was presented on 21 March by Delphi, General Motors and private equity groups that are interested in investing in Delphi, according to the report.
The ball is now back in Delphi’s court, Rapson told AP.
A Delphi spokesman would not confirm to the news agenecy that an offer had been made, but said the company, along with the investors and GM, are still bargaining with the union.
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By GlobalData“That would indicate that we are at least talking,” spokesman Lindsey Williams was reported to have said of Rapson’s comments.
The Associated Press noted that confirmation of the existence of the wage offer came hours after UAW president Ron Gettelfinger said on Tuesday he was tired of playing around with Delphi and vowed to strike if the company continues with plans to void its labour contracts in court [as part of its bankruptcy recovery process].
Gettelfinger reportedly accused the company of playing games with the union and said no talks were under way with Delphi at present. He said he couldn’t remember the last time he talked with Delphi officials and didn’t know when Rapson last spoke to them, according to AP.
“If they void the contracts, we are going to shut them down,” he told the news agency.
The Associated Press noted that Delphi, a parts-making operation of General Motors until it was spun off in 1999, has been operating under bankruptcy protection since October 2005 and hopes to emerge from ‘Chapter 11’ this year.
The company has said it can’t compete due to its high labour costs and has asked a New York bankruptcy court for permission to void previous labour contracts, but it has said it prefers a negotiated settlement to court action, the news agency added.
Negotiations have lasted more than a year without resolution, but Williams reportedly said the company and its investors remain committed to a consensual agreement rather than court action.
AP also noted that a settlement between Delphi and its unions is needed before three private equity firms will invest up to $US3.4bn that Delphi needs to emerge from bankruptcy protection.
The firms, Appaloosa Management, Cerberus Capital Management and Harbinger Capital Partners Master Fund I, can back out of the deal if no agreement is reached with the unions on wages, benefits and other issues, the report added.
Gettelfinger was reported to have said the union had agreed to a two-tier wage structure that allows Delphi to pay new recruits less than older workers and the unions have also agreed with the company on buyout and early retirement packages that have allowed the parts maker to shed thousands of workers.
