Nearly 70 percent of Delphi Corp. workers approved a deal between the UAW and the bankrupt parts supplier that will give workers cash payouts in exchange for slashed wages, the United Auto Workers recently announced.
Workers represented by Delphi’s largest union have approved a historic pact that slashes wages for longtime employees of the auto parts manufacturer but secures thousands of jobs at plants that once were in danger. The ratification announced last Friday comes after two years of controversial negotiations and averts a threatened strike that could have crippled Delphi’s biggest customer and former parent, General Motors Corp.
The pact will make the auto parts supplier more competitive as it tries to emerge from Chapter 11 bankruptcy protection. It comes only weeks prior to the UAW started contract talks with GM, the Ford Motor Co. and DaimlerChrysler AG’s Chrysler Group. The pact will step on the brakes regarding matters involving workers’ uncertainty.
Delphi has about 6,000 workers in Ohio, including nearly 4,000 in Dayton. “The ratification vote at GM’s former parts operation is complete and the agreement was accepted by the membership. The total vote was 68 percent to accept the agreement, 32 percent to reject it,” said a statement by UAW President Ron Gettelfinger and UAW Vice President Cal Rapson.
At Delphi Steering, the largest plant in Saginaw, 83.5 percent of those who belong to UAW Local 699 voted yes, said local President Mike Hanley. The plant has about 2,200 workers and about 1,800 voted, he said. At Delphi Chassis, 79 percent voted in favor of the contract, Local 467 President Jim Hurren said. The plant has about 680 workers and more than 90 percent voted. Hurren added the tally at the Saginaw steering plant was big enough to counter the no vote in Lockport, N.Y., where workers voted it down 1,107-274.
“There’s a few disgruntled people out there, but they’re not living in the real world,” said Hurren, who believes the agreement is good for the workers, because it preserves jobs and offers numerous benefits for workers who would see their wages cut.
A deal is key to eliminating the threat of a strike at Delphi that threatened to injure GM, Delphi’s former parent and currently its largest customer. It also is crucial to the sealing of a $3.4 billion recapitalization offered by determined outside investors.
The new contract will allow Delphi to reduce its overhead substantially, as it bids to compete with lower-cost international suppliers. The agreement includes a total payout of $105,000 over three years that will be offered to about 4,000 of Delphi’s 17,000 UAW workers. In return, the workers’ pay will be cut from about $27 an hour to a maximum of $18.50 an hour by Oct. 1. Supplemental and temporary employees who leave the company will get severance pay of $1,500 for every month worked, up to $40,000.
Under the wage-cut pact Delphi will close four fewer plants than originally intended. The company also plans to close or consolidate into other facilities plants in Coopersville; Columbus, Ohio; two in Milwaukee; Anderson, Ind.; and Wichita Falls, Texas.
Workers at the Columbus plant voted 209-21 in favor of the pact, while members of Local 651 at Delphi’s Flint East plant voted 94 percent in favor. In Athens, Ala., workers at the north Alabama plant, scheduled to close in 2009, approved the pact 508-353, a union official said.
At the Needmore Road brake plant in Dayton, Ohio, workers voted 428-98 in favor of the agreement Thursday. Though the agreement lasts four years, Local 696 president Joe Buckley said that it “guarantees” 750 local jobs through 2015.