Nov. 7, 2005 – Last week a federal bankruptcy judge approved severance and payment plans offered by recently bankrupted auto-parts manufacturer Delphi Corp., setting the stage for a broader showdown with the labor union representing most of the companyâ€™s 35,000 workers. If Delphiâ€™s plans go through, some employees will lose their jobs and all will have to accept drastic pay cuts.
- Delphi Goes Back on Word to Workers (Oct 27, 2005)
Friday, US Bankruptcy Court Judge Robert Drain approved company plans to give 21 top Delphi departing executives eighteen months of pay if they sign a pledge not to work for a competitor for eighteen months, the Associated Press reported. In addition, Drain authorized millions in payments to lawyers, consultants and others who assisted Delphi as it moved into bankruptcy.
The decision closely follows revelations that Delphi is seeking to cut workersâ€™ pay by as much as 66 percent. The company also proposes that the UAW accept lower employer contributions to health care and pension plans.
In a statement to members posted to its website Friday, the United Auto Workers (UAW) said: "It is clear from the content of the proposals that Delphi is not serious about negotiating in the good-faith manner necessary to reach an agreement that would be acceptable. The October 21 proposal was much worse than Delphiâ€™s mid-August proposal which was not acceptable. If the proposals reflect the true position of the company, it is unlikely that an agreement will be consummated."
Additionally, the statement noted that if negotiations fail, the existing contract between the UAW and Delphi will remain in place at least until January 24, the first day of hearings. Should the court grant Delphiâ€™s request, the statement said, "The union would then have a legal right to strike."