Oct. 27, 2005 – In a switch not anticipated by labor union leaders, the nationâ€™s largest auto-parts maker is demanding that workers accept pay that could be as little as one-third of their current compensation as part of its plan to emerge from bankruptcy. The proposal would place many workers below the federal poverty line.
- Delphi Seeks Bankruptcy Protection (Oct 10, 2005)
- Union to Fight Delphi over Worker Pay Cuts, Executive Raises (Oct 13, 2005)
Earlier this month, Delphi Corporation, a former General Motors operation, filed for Chapter 11 bankruptcy protection in the face of mounting operating costs. As part of company plans to restructure, Delphi reportedly sought wage cuts over 50 percent from an unspecified number of workers. But, according to a copy of the active proposal posted to the website of United Auto Workers (UAW) Local 292, the company is now seeking much deeper pay cuts than previously reported by newspapers, the company and the Auto Workers.
The proposed plan, dated October 8, calls for a new pay scale that would pay new hires and low-skilled workers $9 and $9.50 an hour, respectively. Rates would top out at $19.00 for skilled workers with seniority and $18.00 for newly hired high-skilled workers.
Currently, the lowest paid Delphi workers earn between $14 and $27 an hour, The Detroit Free Press reported yesterday.
Stating that Delphiâ€™s proposal "reflects a vision of an America in which an elite few live in luxury while everyone else struggles to make ends meet," UAW President Ron Gettlefinger and Vice President Richard Shoemaker promised last Friday that the union would fight the proposed cuts.
Delphi officials attribute the need to seek greater concessions from workers to the companyâ€™s failure to negotiate a bailout plan from former parent General Moters, the Free Press reports. The management proposal notes, "There is no alternative."
Last week, the company announced that a number of top executives had accepted pay cuts, with Delphi President Rodney Oâ€™Neal waiving twenty percent of his $1.1 million annual salary, CEO Robert Miller dropping twenty percent of his annual take of $1.5 million and twenty other top executives accepting ten percent pay cuts. Union officials and members met that news with skepticism, the Flint Journal reported.
Shortly before filing for bankruptcy, Delhi offered executives bonuses to stay with the company through the restructuring. The proposal was later amended to include severance packages and a pledge from departing officials that they would not take a position with competing companies for eighteen months.
Other concessions sought from the UAW and two other unions representing company workers, the United Steel Workers (USW) and International Union of Electrical Workers (IUEW), included accepting job cuts, plant closings and lower employer contributions toward health insurance and pensions.