QUICKLINKS: Obits NEWCOMERS GUIDESearch Browse by date Thu, Oct 27, 2005Wed, Oct 26, 2005Tue... Delphi plan cuts wages, retire

Auto-parts maker Delphi Corp. wants to cut workers ' wages by as much as two-thirds, begin monthly charges for health care and eliminate health benefits for retirees as part of a plan to exit bankruptcy, according to a letter to the United Auto Workers union.

Delphi workers would earn as little as $ 9. 50 an hour, down from as much as $ 27. 50, under the company's contract offer. The proposals, which would also reduce vacation and pension benefits and remove rights to strike, were presented to the United Auto Workers union on Oct. 21 and are detailed in the 36-page letter obtained by Bloomberg News.

Troy, Mich.-based Delphi, the country's largest auto-parts supplier, filed for bankruptcy protection on Oct. 8 after failing to win concessions from the union or help from General Motors Corp., its former parent and largest customer.

"Delphi cannot survive without significant modifications to the UAW-Delphi collective bargaining agreements," the letter said. The concessions required from the UAW could be even more severe, the letter said, if Delphi's finances continue to deteriorate as the company's management anticipates, according to the letter.

UAW President Ron Gettelfinger issued a statement Oct. 21 saying Delphi's proposal — the details of which aren't publicly known — was designed to "hasten the dismantling of America's middle class by importing Third World wages to the United States."

"It's up to the UAW to make a counteroffer," said Sean McAlinden, a labor analyst at the Center for Automotive Research in Ann Arbor, Mich. "Miller wants to see how far they're willing to go."

Delphi's proposal also would : Charge active workers up to $ 656 per month per family for health care ; such workers don't pay anything for health insurance now.

Scrap health care for workers who've retired, eliminate cost-of-living adjustments, drop coverage for dental and vision care, and reduce holidays and vacations, according to the letter. Freeze accumulated years of service toward the pension plan. Delphi may terminate the pension plan entirely if the UAW fails to provide concessions in other areas, the letter said. Eliminate the "jobs bank" of union employees who are being paid even though they are not working. The company had 4, 000 workers in the bank at the start of October.

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