BusinessWeek Online, May 3, 2006, Wednesday

BusinessWeek Online

The Associated Press/DETROIT
By TOM KRISHERAssociated Press Writer

UAW asks Delphi locals to take strike vote
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MAY. 3 6:08 P.M. ET The union representing the majority of hourly workers at Delphi Corp. on Wednesday asked its locals to take a strike authorization vote, further pressuring the auto parts supplier as it seeks wage cuts.
United Auto Workers Vice President Richard Shoemaker called for the vote in an e-mail to all Delphi local presidents, UAW spokesman Paul Krell said Wednesday.
The e-mail says the locals should complete their voting by May 14, Krell said.
At a meeting of the union's Delphi Council, Shoemaker said the situation was "still ripe for a strike," according to a newsletter sent to members of a local at a Delphi plant in Coopersville, Mich.Delphi filed for Chapter 11 bankruptcy protection in October. As part of its reorganization, it is seeking major wage concessions from its 33,000 U.S. hourly workers.
Krell would not say whether the call for the vote means that negotiations with Delphi are going poorly. If approved, the vote would authorize the international union to call a strike against Delphi if necessary, Krell said.
"Shoemaker said we'd hold a strike authorization vote when he felt the time is right to do it, and he obviously felt the time is right now," Krell said.
Delphi has filed a motion asking U.S. bankruptcy Judge Robert Drain to give it the authority to cancel its union contracts if it fails to reach an agreement to lower wages.
Drain is scheduled to begin a hearing on the motion Tuesday, but he will not rule at that time.
Delphi spokesman Lindsey Williams the strike vote would not effect the Troy-based company's approach to negotiations.
"That has not changed our focus," he said Wednesday. "Our efforts are geared toward reaching a consensual agreement."
The UAW, the largest of six unions representing Delphi hourly workers, and other Delphi unions, have threatened to strike if the contracts are rejected. A strike could have a serious impact on Delphi as well as General Motors Corp., which is Delphi's former parent and largest customer.
Analysts have said a strike could cost GM up to $130 million per day.
The International Union of Electronic Workers-Communications Workers of America, Delphi's second-largest union with 8,000 workers, already has voted to authorize a strike if Delphi rejects its labor agreements.
Labor lawyers not involved in the talks said the UAW's move and its timing was expected.
"There isn't much other leverage that the union can bring to bargaining table at this point, other than to flex the only real muscle it has, which is to withhold its labor," said Jay W. Waks, an employment lawyer representing management at Kaye Scholer LLP in New York City.
The vote "also allows the union leadership to take the temperature of its own membership," said M.J. Asensio, coordinator of the labor relations practice team at Baker Hostetler LLP.
In its bankruptcy filings, Delphi has countered the unions' contention that wage cuts are not necessary, saying it expects to lose $2 billion this year and $5 billion through 2010 unless changes are made.
"Under these projections, Delphi simply will not be able to continue to operate unless it can achieve significant modifications to its business," Delphi said in a filing.
In March, Delphi announced a buyout offer for approximately 17,000 U.S. hourly workers that will be bankrolled by GM. Under that agreement, workers will be eligible for a lump sum payment of $35,000 to retire. An additional 5,000 workers will be allowed to return to GM.
The UAW's headquarters has told local presidents that there have been 3,620 applications for the buyouts at Delphi and 12,400 at GM. Delphi workers could start returning to GM as early as next week, according to the Coopersville union's newsletter.