Buffalo News (New York), November 21, 2005, Monday

Copyright 2005 Knight Ridder/Tribune Business News
Copyright 2005 Buffalo News (New York)
Buffalo News (New York)

November 21, 2005, Monday

HEADLINE: AFL-CIO ready to aid union at Delphi

BYLINE: By Fred O. Williams

BODY:

The Buffalo area is bracing for a labor battle at Delphi Corp., following an exchange of barrages last week by the autoworkers and chief executive Robert S. Miller.
"The (AFL-CIO) Area Labor Federation will definitely play a role in giving support to the United Auto Workers -- at such time they decide they want to take action," said Daniel Boody, president of the Western New York labor organization.
Labor is ready to put its manpower behind letter-writing campaigns, rallies and other efforts to marshal opposition to Delphi cutbacks in the Buffalo area, Boody said. The regional AFL-CIO unit has about 95,000 members.
Already heated labor tensions escalated last week, as UAW leaders called Delphi's latest wage proposal "an insult" and refused to present it to members. It was Delphi's second proposal to unions since filing bankruptcy Oct. 8.
The proposal calls for job cuts of more than 20,000 of Delphi's 34,000 production workers in three years, the UAW said, and would also cut wages to $ 10-$ 12.50 an hour, from a current $ 27 average.
Miller responded saying that at current wages, all Delphi's U.S. plants must shut down, and that the company's proposal is for wages and benefits in line with those at other auto parts plants.
"This is not about moving operations to China, it's about competing with suppliers in the U.S.," Delphi spokesman Lindsey Williams said.
Analysts said the dispute raised fears of a strike at Delphi and caused the stock of its major customer, General Motors, to plummet.
"Negotiations are only as good as the parties negotiating," said Arthur Wheaton, a labor studies instructor at Cornell University's School of Industrial and Labor Relations.
Though the possibility remains more than two months away, a Delphi strike would quickly dry up critical parts for the U.S. auto industry, idling tens of thousands of workers and putting a financial squeeze on other auto part suppliers, as well as GM.
Locally, "I would think a strike would be devastating," said Philip Pusateri, a financial adviser at Ameriprise Financial in Lockport. "I wouldn't want to think what it might do to the area."
Pusateri counsels some Delphi workers who are trying to shore up their retirement savings now, with the likelihood of wage and pension cuts looming. But a strike could erase their incomes entirely if the company responds by shuttering its 3,800-job Niagara County plant, he said.
Not only Delphi would be hit. The autoworkers represent more than 10,000 members in the Buffalo area, many of them at plants tied to Delphi and GM or their suppliers.
Local UAW officials wouldn't comment, referring questions to the national organization in Detroit.
The union expects that its contract at Delphi will remain in place at least until Jan. 24, the date that the bankruptcy court in New York may hold a hearing on the issue if Delphi files a motion in mid-December. Judge Robert Drain has 30 days following the January hearing to decide on the contract.
If the judge allows Delphi to impose lower wages, a strike "is a distinct possibility," said Wesley Wells, executive director of the AFL-CIO's Dayton, Ohio region, a Delphi stronghold. "We could be on strike in the next hour."
The unknown in the contentious negotiations is whether GM will step in with financial help, such as retirement incentives, to sweeten the restructuring for workers. Last week, reports said that GM has begun talks with the UAW about payments.
Wells worked at a Chrysler radiator plant in Dayton, now owned by Germany's Behr Group, that is considered a rival Delphi's Lockport radiator factory. The bulk of the work force -- 1,396 people -- make between $ 10.50 and $ 13 an hour, he said, plus benefits including a pension about half as generous as the former level, he said.
However, there remain 89 "tier one" workers who continue to make the former Chrysler wage of more than $ 26 an hour. The plant's tiered wage structure means new employees coming in at lower wages as older workers retire, Wells said, avoiding an outright pay cut.
Delphi and the UAW agreed to a second-tier wage of $ 14 for new hires last year, but a surplus of labor has prevented the company from hiring new workers at the lower rate.
Boody of the Buffalo AFL-CIO said Delphi's crisis illuminates the damage that trade agreements are doing to Buffalo's economy and other manufacturing areas. "People need to understand its not the fault of a worker making $ 20 an hour, it's the fault of free trade agreements by an administration, allowing companies to outsource their work."
According to Delphi, the average wage for U.S. factory jobs is $ 11.91, while it pays $ 26.97 for comparable work. Benefits and retiree costs bring its hourly labor cost to $ 76.46, the company said.
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