WBEN Radio (Buffalo, N.Y), August 17, 2006, Thursday

Delphi Court Case Looms As Talks Press On
Thursday, August 17, 2006 05:43 AM - WBEN Newsroom
http://www.wben.com/news/fullstory.php?newsid=05599


Detroit- (CBS/WBEN) - Delphi Corp. is due in court Thursday to ask a judge to reject labor contracts, and drastically cut wages for workers at the bankrupt auto parts manufacturer's Lockport plant and the rest of the company.

Talks between Delphi Corp, General Motors and various labor unions were ongoing late Wednesday, in advance of the court date.

Several analysts tell WBEN a deal on wage cuts could be reached soon, even as the company presses on in bankruptcy court, asking a judge to void their union labor contracts. Such a move could force a strike by the 2,000 workers in Lockport.

Arthur Wheaton, a professor at the Buffalo office of Cornell Univeristy's Labor Relations School says some sort of proposed agreement on wage cuts is likely by Labor Day. You can hear more with Wheaton by clicking on the audio link above.

Delphi spokesman Lindsey Williams said "high-level" talks were taking place Wednesday among the various parties, but declined to give specific details.
Toni Simonetti, a GM spokeswoman, said the auto maker "remains fully engaged in discussions with Delphi and other parties in an effort to reach a consensual agreement."

She declined to discuss the timing on a conclusion to the talks. Officials from the United Auto Workers could not be reached for immediate comment.
Officials from the union and the companies have said they want to reach a mutual agreement, but the UAW - in a press release issued Friday - said Delphi is not willing to bend on critical issues on the table.

The negotiations are aimed at helping Delphi clear a number of financial hurdles standing in the way of its planned emergence from Chapter 11 bankruptcy. The company continues to bleed money due to what it calls non-competitive labor costs and unfavorable supply contracts with top customer and former parent GM.

As a result, Delphi is scrambling to restructure various parts of its business and has said it will reorganize with or without the help of GM and the UAW. Delphi on Tuesday announced that it lost $2.6 billion during the first half of the year amid heavy costs for an employee attrition program.

A key step in Delphi's reorganization plan is scheduled for 2 p.m. EDT Thursday, when a court hearing on the supplier's motion to throw out its U.S. hourly labor contracts is scheduled to resume.

The UAW has said it would strike if Delphi if contracts are rejected - a potentially damaging move for GM production.

Delphi has repeatedly delayed hearings on the motion to reject contracts as negotiations continued - a delay last Friday allowed for six more days of talks and suggested some progress, although the UAW has maintained that Delphi thus far has not made acceptable offers on certain issues, including wages.

The company's financial condition has led it to craft a multi-pronged plan to recovery, including proposed wage and benefit cuts. Delphi is also looking to close or sell 21 of 29 unionized plants in the U.S. and is seeking to cancel as much as $5 billion in GM supply contracts.

As of June 30, Delphi had $2 billion in cash on hand, up from the $1.6 billion it held on Oct. 8 when it filed for bankruptcy, not including debtor-in-possession financing.