Buffalo News (New York), June 29, 2007, Friday

Copyright 2007 The Buffalo News

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Buffalo News (New York)

June 29, 2007 Friday

CENTRAL EDITION

SECTION: BUSINESS; Pg. D6

HEADLINE: Delphi pact rejected by 80% of its area workers;

Deal may be OK'd in company-wide voting

BYLINE: By Fred O. Williams - NEWS BUSINESS REPORTER

BODY:

As Lockport goes, so goes Delphi?

Autoworkers at the Niagara County plant rejected a wage-cut deal by 80 percent in results released Thursday, potentially setting the stage for a showdown with the bankrupt auto parts maker.

However, observers still expect the proposed contract to be approved by union members in company-wide voting, whose results are to be released today.

"I would expect to see different results at the national level," said Patrick Heraty, a business professor at Hilbert College in Hamburg who studies the auto industry.

"The options aren't very good," said Arthur Wheaton, an instructor at Cornell's School of Industrial and Labor Relations in Buffalo. "If you vote it down, then what happens?"

Workers in Lockport seem prepared to find out. In balloting Wednesday, 1,107 of them voted to reject the proposal, while only 274 voted for it.

The turnout reflected 63 percent of the approximately 2,200 UAW workers eligible to vote.

UAW workers at Lockport make up about 13 percent of the company's UAW work force. More than half of them are senior workers who earn the "traditional" union wage of $28 an hour, which would fall to between $14.50 and $18.50 in the wage-cut deal.

Company-wide, about 17,000 UAW members are eligible to vote. Of them, 13,000 are recent hires whose wages would not be cut, and who would receive severance benefits if the deal passes.

Senior workers with the most to lose in the proposal turned out heavily to vote in Lockport, said Paul Siejak, president of United Auto Workers Local 686 Unit 1.

Their anger was stoked by seeing executives receive retention bonuses, approved by the bankruptcy court overseeing Delphi's reorganization.

"No one asks about sacrifice for management," Siejak said.

Delphi, GM and the UAW have been negotiating the deal since shortly after Delphi filed bankruptcy in October of 2005. In the absence of an agreement, Delphi management has threatened to cut wages unilaterally, a move that union officials said would trigger a strike.

GM, which relies on parts from Delphi, is bankrolling the settlement and offering incentives, including "flow-back" rights to auto plant jobs and guarantees of continued orders. GM spun off Delphi, its former parts unit, in 1999.

"This isn't just about wages and benefits," Siejak said. "It's also about jobs for the community."

For Lockport, GM would guarantee work on new vehicles until 2015 under the agreement, he said.

The Niagara County plant, the region's largest manufacturer and the county's largest private employer, is one of four plants that would remain in Delphi. Others would revert to GM or a contractor, while 10 are slated to close.

Siejak said he expected the "no" vote after seeing workers' heated reaction to the proposal during meetings on Monday.

Senior workers who have spent the most time at Delphi are understandably upset at being asked to shoulder the company's cost-cutting burden, Heraty said.

The local vote "is probably a reflection of frustration and maybe even betrayal," he said. "It's quite possible the local folks think they can get a better deal and they're going to hold out for that."

e-mail: fwilliams@buffnews.com