Delphi Corporation, the world’s largest maker of car parts, was ordered by an arbitrator to call back about 500 workers laid off at a Moraine, Ohio, factory, the union representing the employees told Bloomberg News.

The report citing International Union of Electronic Workers-Communications Workers of America spokeswoman Lauren Asplen, said Delphi must reinstate and provide back pay to the employees because of a contract provision that guarantees 1,500 jobs at the air conditioner compressor plant until 2011.

“We are disappointed in the decision,” Troy-based Delphi spokesman Brad Jackson told Bloomberg News, adding: “We’ll be looking at all of our alternatives in this situation.”

Bloomberg News cited the union as saying the company laid off 500 of the plant’s 1,500 workers in January and has since called back 94.

According to the report, the union said Delphi argued that the provision isn’t enforceable because it was agreed to before the company’s 1999 spin-off from General Motors Corp but Jackson wouldn’t comment on Delphi’s arguments in the case.

Bloomberg News noted that Delphi this week began talks on a new national contract with the electronic workers union, which represents about 10,000 of the company’s employees.

Delphi also is negotiating a new contract with the United Auto Workers union that covers about 30,000 employees, the report added, noting that the current agreements expire in September for the UAW and November for the IUE.

According to Bloomberg News, Delphi said in a filing last month with the US Securities and Exchange Commission that “continued employment at prior levels for a significant length of time would adversely impact our ability to achieve cost savings and achieve an acceptable net income” at the Ohio plant.

The factory is one of 16 plants that Delphi is trying to return to profitability as part of its Automotive Holdings Group, formed in October, the report said.

The union told Bloomberg News that workers gave up $US251 million in wages and benefits in exchange for the jobs guarantee, which was established to 1996.

The union also said Delphi has been moving compressor work from the Ohio factory to Mexico, Hungary, Korea and elsewhere, according to Bloomberg News.