UAW workers vote on tentative agreement with Delphi, GM

6/28/2007

DETROIT Thousands of Delphi Corp. workers at 17 facilities across the country are deciding whether to approve a four-year contract agreement that would cut wages for older workers but preserve jobs for many members of the United Auto Workers.

Voting got under way Thursday morning at a union hall in Flint, while it was to have started late Wednesday in other places. Many locals will end voting by Thursday afternoon, but it will stretch into the night at others. The UAW expects to have vote totals on Friday.

The tentative agreement, signed last week after two years of often bitter negotiations involving the UAW, Delphi and its former parent, General Motors Corp., lowers wages for many longtime workers from about $27 per hour to a pay scale for all workers that runs between $14 and $18.50.

Analysts have said the deal likely will become the pattern for other unions representing workers at struggling Delphi, which was GM s parts-making operation until it was spun off as a separate company in 1999. It also could set wages in the rest of the domestic parts industry and perhaps affect national contract talks later this summer between the UAW and GM, Ford Motor Co. and Chrysler Group.

Harley Shaiken, a professor at the University of California-Berkeley specializing in labor issues, said the Delphi agreement likely will pass because younger workers whose jobs were protected outnumber the older workers whose wages were cut.

It s always difficult to predict, but in this case the agreement is so much better than the initial offer that I think most Delphi workers will go for it even with some enthusiasm, hoping they can build on it for the future, Shaiken said.

Troy-based Delphi offered unions a base wage of $9 an hour shortly after it filed for bankruptcy protection in October 2005.

In the pact negotiated with Delphi and GM, the UAW managed to keep three more plants open than Delphi initially had proposed. It also got a series of options for longtime workers that include a $35,000 annual payment for three years to production workers whose wages will be cut. Skilled trade wages will remain unchanged under the pact.

On Monday, most newer workers interviewed near the Flint East plant after being briefed on the agreement were thrilled. The pact preserves their jobs making instrument clusters, fuel pumps and other parts until at least 2015, with GM or a third party it designates agreeing to operate the plant.

Some older workers were wary. Others said they would vote for it because the deal has so many protections, buyouts and early retirement opportunities for them.

Across Delphi, only 4,000 of the company s 17,000 UAW workers are at the higher pay scale, their ranks decimated by early retirement and buyout packages offered last year by GM and Delphi.

Delphi has 20,000 production workers nationwide, with about 3,000 represented by other unions.

GM, which was involved in the talks because it is on the hook for an estimated $7 billion in liabilities for Delphi pension and retiree health care expenses, likely will subsidize the older workers wages and pay for some of the exit packages.

Delphi and a spokesman at the UAW s Detroit headquarters have declined comment on the pact.

The pact would leave Delphi operating four UAW plants: Grand Rapids; Kokomo, Ind.; Lockport, N.Y.; and Rochester, N.Y. GM or a third party would run the Flint East plant, Saginaw Chassis and the Needmore Road plant in Dayton, Ohio.

Delphi plans to sell its Saginaw Steering plant and others in Adrian; Sandusky, Ohio; and Cottondale, Ala. It would close or consolidate into other facilities plants in Coopersville; Columbus, Ohio; two in Milwaukee; Anderson, Ind.; and Wichita Falls, Texas.

GM would be able to unload significant liabilities in the agreement, and its stock price rose after the pact was made public. GM shares were up 71 cents, or 1.95 percent, to $37.06 in Wednesday afternoon trading.

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