Hourly workers at Delphi Corp.’s factory in Lockport, N.Y. rejected a proposed pact that would require them to accept sharp wage cuts and help the Troy-based company emerge from bankruptcy later this year.
Workers rejected the pact by a 1,107-274 margin, with more than 1,000 employees opting not to vote, union officials said. But a union official at the Delphi facility in Michigan said that the agreement was passing by a wide margin.
Art Reyes, the president of United Auto Workers Local 651 that represents workers at Flint East, said that 94 percent of workers who voted supported the agreement. Reyes would not release the exact vote total, but said the vast majority of the 1,200 workers eligible to vote did so. “We had an outstanding turnout with overwhelming support,” Reyes said. “This agreement is going to secure the site for their families and the community. This is a good agreement.”
The UAW pact cut wages for many old workers from about $27 per hour to a pay scale for all workers. The notable cut runs between $14 and $18.50. Analysts said the deal likely will become the pattern for other unions at Delphi. Additionally, it also could set wages in the rest of the domestic parts industry and perhaps affect national contract talks later this summer between the UAW and domestic auto companies.
Ratification of the agreement is required prior to the finalization of Delphi’s $3.4 billion recapitalization deal. The prospective investors are led by the Appaloosa Capital Management LP. But many dissident employees, angered by substantial wage cuts, have initiated a vigorous campaign to persuade workers to reject the deal. To convince them in a short span of time, as swift as Vibrant performance, would be greatly advantageous.
About 17,000 UAW members were eligible to vote on the pact, reached last week after more than two years of contentious negotiations among the union, Delphi and its former parent, the General Motors Corp. Harley Shaiken, a professor at the University of California-Berkeley specializing in labor issues, said that he expected the agreement to pass, although it could run into opposition at the plants Delphi plans to close. “I think this is a vote that has a lot of volatility associated with it,” Shaiken said Thursday. “What you might think makes sense can be shaped by anger at the context and by specific local issues that influence the vote.”
The company plans to close or consolidate into other facilities plants in Coopersville; Columbus, Ohio; two in Milwaukee; Anderson, Ind.; and Wichita Falls, Texas. The union expects to have vote totals on Friday. If the contract is disapproved, it is not clear what the companies would do.
The deal will have a much larger impact than just on Delphi and GM, said David Cole, the chairman of the Center for Automotive Research in Ann Arbor. “It’s a pattern supplier agreement,” said Cole, who added that sales of many factories by suppliers and even Ford Motor Co. have been delayed while Delphi negotiations dragged on. “Nobody’s going to pick up any of these assets unless they have an agreement that they think is going to be competitive over the longer term,” he stressed.
While it likely was difficult for UAW leaders to agree to reducing wages, the union was probably able to preserve far more than the $9 per hour that Delphi proposed early in the bankruptcy proceedings, said Shaiken. “The agreement reflects the dismal context of the auto parts industry in a global world. The $18 wage is approximately double what Delphi offered immediately after the bankruptcy. So they managed to salvage a much better agreement.”