Delphi workers OK deal to slash pay
6/30/2007DETROIT - Workers at struggling auto parts giant Delphi Corp.'s largest union have approved a historic contract agreement that cuts wages for many longtime workers but secures thousands of jobs at plants that once were in jeopardy.
The ratification comes after two years of sometimes contentious negotiations and averts a threatened strike that would have crippled Delphi's former parent, General Motors Corp.
Sixty-eight percent of the workers who voted were in favor of the new four-year pact, while 32 percent were against it, the UAW's leadership said yesterday.
About 17,000 workers at 17 Delphi facilities across the United States were eligible to vote on the deal, which also allows some plant closings and cuts wages for longtime workers from around $27 an hour to a pay range for everyone that runs from $14 to $18.50.
Included were workers at plants in Adrian and Sandusky.
The pact will make Delphi more competitive as it tries to emerge from Chapter 11 bankruptcy protection, but it also clears the table for the UAW to concentrate on crucial contract talks later this summer with GM, Ford Motor Co., and Chrysler Group, said David Cole, chairman of the Center for Automotive Research in Ann Arbor.
The agreement makes Delphi a much stronger company in the businesses it considers to be its core: electronics, safety systems, and heating and air conditioning systems, Mr. Cole said.
"I think Delphi is really poised to be a powerhouse, because they have a technology base that is really strong," he said.
It also shows that the UAW is willing to bend to help companies that are struggling against lower-cost competitors, and that could be a big factor in talks with the Detroit Three as they seek labor cost parity with Toyota Motor Corp. and Honda Motor Co., Mr. Cole said.
Mike Hanley, president of a large UAW local in Saginaw, said the agreement proves that UAW members can change with the global economy.
"They recognized a reality that as the world changes, we have to adapt, whether we like it or not," he said, adding that the deal could have been worked without Delphi heading into Chapter 11.
Analysts have said the deal likely will become the pattern for other unions at 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 the national contract talks with the Detroit Three automakers.
The agreement also clears the way for the sale of several Delphi factories, including Adrian and Sandusky, and some plants jettisoned by Ford, Mr. Cole said.