Delphi And UAW Reach Deal On Wage Cuts

General Motors Corp. and auto supplier Delphi Corp. announced deals with the United Auto Workers
AP / CBS
Struggling auto parts maker Delphi Corp. reached a tentative wage-cutting agreement Friday with its largest union in what may set the pattern for future pay in the U.S. automotive parts industry.

The deal, which still must be voted on by Delphi members of the United Auto Workers, was signed just before a 1 p.m. meeting between the UAW leadership and presidents of the union's locals.

Details of the agreement were not released, but Delphi said in a statement it's a "significant milestone" in the company's quest to emerge from Chapter 11 bankruptcy protection.

Delphi has about 6,000 employees in Indiana — 5,200 workers in Kokomo, with about 2,300 of those being union workers — plus operations in Anderson.

Union officials speaking on condition they not be identified by name earlier this week because the deal had not yet been completed said the pact would cut wages for longtime UAW workers from around $27 per hour to between $14 and $18.50.

Industry analysts say it could become a template for other parts suppliers.

The pact, if approved, would end the threat of a strike that could have shut down production at General Motors Corp., Delphi's largest customer. It brings to a close two years of often contentious negotiations in which the UAW threatened to strike and accused Delphi of leading a race to dismantle the middle class.

Troy-based Delphi, on the other hand, said it needed lower wages to compete in a global economy.

The former parts arm of GM, Delphi was spun off as a separate company in 1999, filed for bankruptcy protection in October 2005 and asked for court permission to void its labor contracts.

GM is also involved in the agreement announced Friday because it is on the hook for an estimated $7 billion in liabilities for Delphi pension and retiree health care expenses.