Delphi Corp. extended sweetened buyout offers Friday to all 24,000 employees represented by the United Auto Workers union in a bid to coax more to leave the bankrupt auto supplier and avert a crippling strike.
A new agreement among Delphi, the UAW and General Motors Corp. offers workers with more than 10 years’ seniority $140,000 to leave and those with 10 years or less $70,000. Those who take the buyouts will receive pensions but give up retiree health benefits.
The agreement raises the ante from one announced March 22 that offered 13,000 UAW workers a $35,000 buyout. It also matches an offer made to GM’s 113,000 UAW members.
About 10,000 Delphi workers who had accepted the earlier offer will be allowed to consider the new one, UAW spokesman Paul Krell said.
Art Reyes, vice president of UAW Local 651 in Flint, Mich., where Delphi plans to close a massive, nearly 100-year-old plant, predicted the expanded offer would encourage more workers to take the money and move on.
“A lot of people will look at it and say the auto industry is not for me anymore,” he said. “If we can’t flow back to GM, this gives us a chance to move on.”
“Flow back” refers to a GM offer to bring 5,000 Delphi workers back to the automaker. GM spun off Delphi in 1999, and many of its UAW members are former GM employees.
So far, 1,105 have been offered jobs at GM, which itself plans to close 12 production facilities and cut 30,000 workers by 2008.
Reyes, who has 17 years’ seniority, said his only hope until now was to get picked up by GM. With no certainty of that, Reyes said he would look at the buyout.
As for the expanded buyout, Reyes credited the UAW with arranging a deal that would benefit as many workers as possible.
Delphi said in a statement Friday that “productive framework discussions” are continuing on comparable buyout offers for 9,000 Delphi workers represented by other unions.
The new offer, which requires the approval of U.S. Bankruptcy Court, is the latest sign that Delphi, GM and the unions will agree to lower wages and benefits, and avoid a strike. Delphi is GM’s largest supplier and a strike could shut GM’s vehicle production in a matter of days.
Delphi filed motions March 31 to void its union contracts. Hearings on the motions were to continue this week in U.S. Bankruptcy Court in New York, but Friday they were adjourned until Aug. 11 at Delphi’s request to allow more time for negotiations.
The motions and “the ensuing hearings have functioned as an impediment to negotiation of the difficult issues at hand. Delphi’s decision to adjourn the hearings is a step in the right direction,” UAW President Ron Gettelfinger and Vice President Richard Shoemaker said in a statement.
The number of workers who accept buyouts will help determine how much Delphi will pay remaining employees.
UAW members make $27 an hour, but in its most recent proposal, Delphi wanted to reduce that to $16.50 if GM pitched in or to $12.50 if it doesn’t. GM is helping Delphi pay for the buyout offers.
“We definitely see this as a sign of progress toward reaching a consensual agreement with Delphi and its unions,” GM spokeswoman Gina Proia said.
As part of its plans to emerge from bankruptcy, Delphi has said it would close or sell more than 20 North American plants and reduce its union workforce to 10,000 or less.
The latest agreement comes as the UAW prepares to gather in Las Vegas Monday for its convention, held every four years. The deal is likely to be a hot topic, UAW spokesman Krell said, but is not expected to be a matter on which delegates will vote.
Gettelfinger is expected to be re-elected to a second four-year term, but Shoemaker, the union’s chief negotiator with Delphi and GM, is retiring.
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