Hourly workers at Delphi could see wage and benefit cuts as early as this spring, its officials reportedly said.

Delphi chairman and CEO Steve Miller told The Associated Press (AP) the company plans to propose cuts to its unions on October 21 and, if an agreement isn’t reached by mid-December, will ask a bankruptcy judge to void its contracts.

Delphi lawyer John Butler reportedly said he didn’t expect any litigation over the contracts until the first quarter of next year.

Miller told the news agency he will work closely with the United Auto Workers union, which represents most of the company’s 30,000 US hourly workers, to agree a new contract and added that Delphi could have asked the bankruptcy court for emergency relief from its labour contracts but didn’t.

Miller reportedly said he understands workers are angry, but the company is paying hourly workers two to three times more than its competitors – they get $US27 an hour and their total wage and benefit packages are worth around $65 and has now proposed cutting that back by about 60%.

The Associated Press noted that United Auto Workers Local [branch] 686 in Lockport, New York, this week told Delphi workers to prepare for a strike, one of the first indications that unions could be planning to disrupt Delphi’s operations.

Miller reportedly said the best thing workers can do for their own financial security is to stay on the job and that strikes may lead to even more plant closures than already planned and affect pension plan restoration goals.

AP said he also fiercely defended plans to boost a severance package for 21 of Delphi’s top executives on Friday, the day before Delphi filed for bankruptcy protection, giving them 18 months’ severance pay instead of 12, in return for an 18-month non-compete clause.

Miller reportedly said the industry average for a severance package is 24 months and Delphi wants to keep its executives because looking for new ones would be disruptive – he added that executives haven’t received bonuses in three of the last four years and their stock and stock options have lost value.

He also claimed they could get a better deal elsewhere and that headhunters were “swarming”.

The Associated Press noted that Miller isn’t eligible for the package, and that he said he might cut his own $1.5 million base salary as the company’s restructuring proceeds. He also claimed he could be sacked without compensation.

AP said Miller wouldn’t be drawn on which plants are at greatest risk of closure, saying only that each will be looked at for viability.

“If we do all this right, Delphi will remain one of the world’s leading global automotive suppliers. It will be a jewel of a company and a technological powerhouse for years to come,” Miller, a restructuring expert recruited in July, told the Associated Press.

“But if we do it badly, Delphi may be broken up into small pieces. The impact of a collapse could potentially injure most of the world’s automakers and perhaps fatally wound General Motors. I am determined not to let that happen,” he added, according to the Associated Press.