Delphi Corporation, which filed for bankruptcy protection earlier this month, is asking the United Auto Workers to agree to pay cuts of more than 60% for hourly workers and to relinquish health and pension benefits and vacation time, according to a summary of the auto supplier’s proposal distributed to union members in Indiana.
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The Associated Press (AP) said the summary was posted on the website of UAW Local [branch] 292 in Kokomo, Indiana, as well as a website run by Kokomo-area union members.
According to the summary, Delphi wants to cut base wages to $US9.50 to $10.50 an hour for production workers and to $19 for skilled trades workers. New production workers would start at a base rate of $9 an hour. Right now, Delphi hourly workers make $27 an hour or more.
The Associated Press said that, under the proposal, Troy-based Delphi would eliminate a jobs bank that gives full pay and benefits to around 4,000 laid-off workers, which the components maker says costs it $400 million each year. It also would have the right to sell, close or consolidate any plant.
AP added that Delphi’s pension plan would be frozen and accept no new participants after January 1, according to the summary. Delphi also could reduce retiree benefits or terminate the pension plan, but no further details were given in the summary.
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By GlobalDataThe news agency noted that Delphi and its former parent, General Motors, are still settling how much GM owes Delphi’s retirees. GM has said it could be liable for up to $12 billion in pension obligations but expects to pay much less.
According to the report, hourly workers would be asked to pay health care ‘deductibles’ for the first time, of $900 per individual and $1,800 per family. Dental and vision care would be eliminated. The proposal would drop annual paid holidays from 16 to 10, including a paid week of holiday between Christmas and January 1. It also would eliminate annual cost-of-living adjustments.
The Associated Press said meither Delphi nor UAW leadership has officially released details of the proposal, since US Bankruptcy Judge Robert Drain granted Delphi’s request to keep its contract proposals confidential. Delphi is scheduled to appear in bankruptcy court on Thursday.
AP noted that union leaders criticised the proposal harshly when Delphi presented it to them last Friday.
The UAW represents most of Delphi’s approximately 34,000 US hourly workers, according to the report.
AP noted that Delphi chairman and CEO Robert “Steve” Miller has said he understands workers are angry, but the company is paying wage and benefit packages worth $65 an hour, which is two to three times more than its competitors.
Miller reportedly has expressed optimism that a deal with Delphi’s unions can be reached by mid-December. If an agreement to cut wages and benefits isn’t reached, Delphi could ask the bankruptcy court to void its contracts. The court could then impose new contracts in the first part of next year.
