Unions Oppose Voiding Delphi Contracts

DETROIT -- The United Auto Workers and other unions opposed Delphi Corp.'s attempt to cancel its labor contracts in court filings Friday, saying the auto parts supplier has failed to prove it needs to slash workers' wages as part of its Chapter 11 restructuring.

"This is a case in which the debtors have opted to place litigation before bargaining and to place confrontation before consultation," said the United Steelworkers, which represents about 1,000 of Delphi's 33,000 U.S. hourly workers.

Unions aren't the only parties opposed to Delphi's motion. Appaloosa Management LP, a New Jersey-based hedge fund that owns 9.3 percent of Delphi's stock, said in a filing that Delphi hasn't proven canceling its contracts would be better than waiting until they expire and renegotiating them. Appaloosa also is concerned Delphi's motion will be considered before a committee representing Delphi's 300,000 shareholders can be formed to review it.

Delphi, which filed for bankruptcy protection in October, asked a federal judge to void its labor contracts March 31 after it failed to reach an agreement to lower wages with its unions and General Motors Corp., its former parent and largest customer. Under its latest proposal, Delphi wanted to lower wages from $27 an hour to $16.50 an hour by 2007.

U.S. Bankruptcy Judge Robert Drain is scheduled to consider Delphi's request May 9. He ordered opponents of the plan to file their objections by Friday and gave Delphi until May 1 to respond.

The UAW, which represents 24,000 Delphi hourly workers, said Delphi's motion is premature because it depends on GM to supplement workers' wages, something GM hasn't agreed to do.

I worked at Delphi as an engineering Co-op when I was in college. That was quite a while ago and it was Delco at the time.

There was a very consistent and ongoing problem of machines getting jammed and damaged so that they had to be taken offline and repaired whenever deadlines approached, so that workers could get overtime pay.

The company was spending a fortune on air shipping parts to get them to GM in time to avoid them having to shut down the manufacturing line because of it.

Management knew who was doing it. They knew how they were doing it. The engineers made modifications to the machines to make sure that it couldn't be happen unless it was being done intentionally. However, the only way they could prevent it was to have people constantly watch those people. They even tried that under the guise of wanting to witness the problem occurring.

The workers complained to the union that they were being harassed.

There were hard working people there. There were people there who definately qualified as skilled labor and were valuable employees.

However, I have a hard time respecting them when they'd all join ranks to protect the people who would purposfully damage machinery and cost the company tens of thousands of dollars so that some of them could work some overtime hours and would do it rather regularly.

I have little reason to respect that union.

However, Delphi's management doesn't deserve a lot of respect either.

They learned nothing from the steel industry going bankrupt in the 80s. They kept agreeing to contracts with the union that would obviously destroy the company in the long run, but they'd agree to them because it would keep the factory running in the short term. After all, not one gets bonuses when the factory is shut down due to a strike.

Management and the Union agreed on a labor contract. Delphi should not be able to cancel that contract unilaterally unless there is no other choice.

Delphi should have to live up to their commitments. They've made such horrible mistakes for so long, I'm not sure they should be granted protection from creditors. If they can't convince their creditors that they can fix things, the creditors should be allowed to force their assets to be liquidated to cover their debts. Delphi doesn't deserve another court ordered chance.

There comes a point where we need to let bad companies fail.

Let another company try to succeed where Delphi has failed.

Let them try at will employment.

401K plans instead of pensions, so workers futures are tied to the company's future.

Let wages be determined by the market. Paying fair wages for good workers without a union causing problems, decreasing efficiency and driving up costs is working just fine for Honda.

Honda is able to pay competitive wages at plants in the same state as Delphi and GM, and remain profitible. They are non-union. They are more efficient.

It works out better for the workers. It works better for the company.

Who is it bad for? The Unions. Because they almost always do more harm to employees than good long term.

I can understand trying to keep GM from going under. That would hurt a lot of consumers that own cars that were made by them.

Delphi can be replaced, and completely going under is what the Management and the Union deserve. Time to quit protecting them all from the consequences of the choices they made.

1968 was the watershed year. That's when they negotiated the guaranteed wages contract. Whole business model changed because of it.

I remember reading an article about the pay scale for union auto workers, early - mid 80's I think.

The job that impressed me the most was the "wheel guy". Job tasks were - put tire on, put lug nuts on - and two or three other equally complicated tasks.

That person was paid almost $20 an hour.

And I said to myself, "No way. They really can't be paying someone that much for doing that! Pay scales like will bankrupt the company!"

Greed.

No skill.

But pay me big $$$ anyway because I AM UNION.

Congrats to ya, folks.

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