Tuesday, May 16, 2006

UAW Authorizes Delphi Strike If Needed

May 16, 2006

While SSG is of the opinion that the involved parties are merely "jockeying for position", those that follow satellite radio should be aware of this story, and keep close tabs on it. SSG is of the opinion that these parties will likely come to some resolution that will avoid a strike, and if that does not happen that any strike would be short lived.

By David Bailey
CHICAGO (Reuters) -

The United Auto Workers on Tuesday said its U.S. hourly workers overwhelmingly authorized union leaders to call a strike should bankrupt auto parts maker Delphi Corp. toss out its labor contracts.

The union, which represents about 24,000 Delphi blue-collar workers at 21 U.S. facilities, said the approval came by more than 95 percent of votes cast. Delphi has more than 33,000 U.S. hourly workers overall.

A strike could quickly halt North American production at the Troy, Michigan-based parts maker, former parent General Motors Corp. and other auto and truck manufacturers, though such a move would probably be at least several weeks away.

The widely expected result continues the chess match between Delphi and its unions over the company's proposal to slash wages and benefits of U.S. hourly workers and reduce its U.S. operations significantly to emerge from bankruptcy.

"The strike authorization vote does nothing to change our focus, which has been and continues to be reaching a consensual agreement," Delphi spokesman Lindsey Williams said.
Delphi in late March filed court papers to void its union contracts after failing to obtain concessions from its unions. A hearing on the request began last week and is set to continue later in May in U.S. Bankruptcy Court in New York.

Judge Robert Drain has encouraged Delphi and the unions to pursue an out-of-court settlement; and in other bankruptcy cases, judges have put off ruling on requests to void labor contracts for extended periods while the sides negotiate.

"(The vote) sends a reminder that this remains an overhang for the industry, but in reality, it doesn't change the dynamics of the negotiations very much," Morningstar analyst John Novak said.

GM Chairman and Chief Executive Rick Wagoner recently called resolving the dispute between Delphi and the unions an urgent priority, and analysts quoted GM's Chief Financial Officer Fritz Henderson as saying he expected a deal with Delphi and the UAW within 60 days.
Delphi, which filed for bankruptcy in the U.S. last October, plans to close 21 of 29 U.S. union plants. It also expects to cut thousands of salaried workers and up to 40 percent of corporate officers from its work force and close two dozen international plants.

"The UAW didn't have much of a choice; they had to show unity," Novak said. "There is still time for (a settlement) and it will take a few more weeks to see how this evolves."
Members of the other union that represents a large number of Delphi's U.S. hourly workers -- the International Union of Electrical Workers-Communications Workers of America with 8,500 already have approved strikes if necessary.

Delphi has asked GM, which remains obligated to provide Delphi some benefits under its UAW agreements, to help fund the reorganization for the parts unit it spun off in 1999.
So far, GM, still Delphi's largest customer, has agreed to put up money for a plan to make up to 13,000 Delphi UAW workers retirement-eligible and to take back up to 5,000 more.

5/16/2006 02:15:00 PM

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