UAW Reaches Agreement With Delphi

DETROIT _ Delphi worker Ken Blackmer was stocking parts on the assembly line at Flint East on Friday when he heard that UAW members at the auto-parts maker had approved a contract proposal that would save his plant.

“I just got this big smile on my face,” said the bearded 54-year-old. “I wanted to holler, `Yahoo!’”

Blackmer, one of hundreds of relieved workers in Flint, got one of the better ends of the deal. He expects to keep his job and his wage of about $15 an hour. Just a few weeks ago, Blackmer thought he’d have to start looking for a job, expecting the plant to be shut down.

But his union brothers and sisters at 10 UAW plants face just that fate in this contract, approved by 68 percent of voting members.

It’s part of Delphi’s plan to shrink its business and cut costs through wage and job cuts as it reorganizes in Chapter 11 bankruptcy.

The contract includes:

_The closure of 10 UAW plants.

_Promises of contracts to supply GM for most of the 11 plants that will stay open, including four that Delphi will keep. Seven will be sold.

_Wage cuts of about $10 an hour for 4,000 workers at Delphi’s highest UAW production wage level. Those workers will be offered $105,000 over three years in exchange for taking lower wages, as first reported in the Detroit Free Press.

Those workers also will have the right to flow back to GM as positions open up, and they will be offered buyouts.

“It’s a remarkable moment in labor relations that employees ratify deep pay cuts and a whole new paradigm in their work relationship,” said Mike Whitty, a labor-relations professor at the University of Detroit Mercy.

The UAW deal is an important step for Delphi as it negotiates financing deals that help it emerge from bankruptcy protection.

From here, UAW locals will start negotiating local agreements, in which Delphi and GM have started to ask for flexibility on issues including work rules, job classifications and outsourcing. Flexibility on those issues often leads to layoffs and workers taking on more responsibilities, Whitty said.

“We’re not resistant to the idea of looking at flexibility, but fairness continues to be critical,” said Mike Hanley, president of UAW Local 699, which represents about 2,300 workers at Delphi’s Saginaw Steering plant.

Delphi also is in contract talks with its five smaller unions that represent 3,000 workers.

Workers in Lockport, N.Y., a plant Delphi plans to keep operating, voted against the deal. About 1,200 of the 2,200 UAW workers eligible to vote in Lockport were long time Delphi employees, who will see their wages cut under the deal.

These higher-paid workers have the option of taking a buyout, a cash payment to make up for the lower wages or moving to open positions at GM. But with only two GM plants in New York, employing 2,000 people, the chances would be slim for workers to make such a move.

GM, which spun off Delphi in 1999, is paying $7 billion to ease the transition for workers who will see wage cuts.

During talks, the UAW criticized Delphi management, saying they demanded too much. UAW President Ron Gettelfinger credited GM for bringing negotiations to a conclusion. For the second time in a week, the union declined to use Delphi’s name, instead calling it “GM’s former parts operation.”

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CONTRACT HIGHLIGHTS

Traditional workers _ at about $28-an-hour wages _ would get cash payouts, including buyouts of as much as $140,000, or buy-downs of $105,000 over three years to make up for a wage reduction.

Traditional workers would get to flow back to General Motors Corp. as positions become available.

Newer workers, making $14 to $18.50 an hour, would see no wage cut and smaller wage increases than in the current contract.

The proposal would let Delphi close 10 UAW plants, keep four plants and sell seven, including selling three plants by way of GM.

Newer workers who are laid off would get a severance package of $1,500 for every month of service up to $40,000.

Skilled-trade workers would get a onetime payout of $10,000 to make up for higher out-of-pocket health care costs.

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WHAT’S NEXT

Now that UAW members have ratified a new contract with Delphi, three important things can happen:

_Negotiating local agreements: Local union leaders will start negotiations immediately on plant-specific agreements that lay out work-rule issues. General Motors Corp. and Delphi Corp. said in the national contract that they want more flexibility to let skilled workers do production work and allow more outsourcing at plants. The national agreement sets a 60-day negotiating period for these local contracts, which would then go up for ratification votes by their members.

_Automaker talks: Detroit-based UAW International heads to its next bargaining battle_negotiating with the Detroit three. Next month, the UAW begins talks on national agreements with GM, Ford Motor Co. and the Chrysler Group.

_Delphi bankruptcy: With a ratified contract, Delphi has a pact that is essential for it to renegotiate a financing deal with investment banks and private equity firms, including Appaloosa Management and Highland Capital, to bring Delphi out of bankruptcy protection.

The company won court approval this week to file its Chapter 11 reorganization plan by the end of the year, securing a five-month extension.

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