Delphi Asks To Void Union Deals

Delphi Corp. workers upset by the auto parts supplier's proposal Friday to close or sell many of its plants said the plan would ruin some employees' lives and hurt communities that rely on the facilities for jobs and tax revenues.

"You're going to see the tumbleweeds," said Allen Huguely, who works at one of five Delphi plants in the Dayton area that employ 6,000. "This whole city is going to suffer."

The United Auto Workers reacted angrily to Delphi's announcement, reports Jeff Gilbert of CBS Radio station WWJ (audio). The UAW warned "it will be impossible to avoid a long strike" if the judge agrees to void the contracts and Delphi imposes its most recent wage proposal.

Delphi asked a federal bankruptcy court to void its labor contracts as part of a restructuring plan that includes selling or closing 21 of its 29 U.S. plants, including six of its 10 plants in Ohio that employ 7,500 people. Four Dayton-area sites and plants in Columbus and Sandusky are on the list for closure or sale, along with plants in Milwaukee; Wichita Falls, Texas; New Brunswick, N.J.; and Flint, Adrian and Saginaw, Mich.

"Spark plugs went away. Oil filters went away. Anytime that you see something like this, it's a blow," said Art Reyes, vice president of United Auto Workers Local 651, which represents the 2,700 workers at the Flint East plant in Michigan.

"It's pretty frustrating for all of our members, and myself included; quite a big disappointment," added Tom Basner, bargaining chairman for UAW Local 699, which represents about 4,000 workers at the Saginaw steering plant.

If negotiations fail and Delphi workers carry out on threats to strike, it would bring the auto industry to its knees, reports CBS News correspondent Anthony Mason.

For the UAW, it's also a turning point. The union has seen wages and benefits erode in recent years, but this really could mark then end of the golden age of the UAW, Mason adds.

Delphi, its unions, and General Motors Corp., Delphi's former parent and largest customer, spent months negotiating but were unable to reach a wage agreement.

Henry Reichard, chairman of the International Union of Electronic workers' automotive conference board in Dayton, said Delphi's plan will hurt efforts to avoid a strike.

"We will not be threatened or intimidated into accepting an agreement that dismantles our plants and devastates our membership," he said.

Products made at the plant still could be profitable for another owner, Reichard said.

"Just because Delphi doesn't consider them core businesses doesn't mean they're not necessary," he said.

Jim Hurren, president of UAW Local 467 which represents workers at the Saginaw brake plant, agreed, saying his site has a lot of assets.

"We make a good quality product. We've got an experienced work force," he said.

Delphi, which has 13,000 workers in Ohio, has identified eight U.S. plants that are considered critical to its U.S. operations. Plants in Warren and Vandalia, Ohio, are included among those critical facilities, which the company said will focus on product lines such as safety features, electronics, diesel and gas powertrains and climate control products.

Twenty-one plants that do not make core products, including those that make brakes and chassis, instrument panels, door modules and steering components, would be sold or closed.

The Sandusky plant is the area's second largest operation, and closing it would be devastating, said Mark Litten, head of the Greater Erie Marketing Group, an economic development agency in Sandusky.

The plant in northern Ohio has been profitable the last five years and remains a vital supplier for GM, Litten said.

"My guess is it will be sold rather than closed," he said.

In the Dayton area, Delphi plants have an annual payroll of $260 million and in 2005 paid about $12 million in income and property taxes to local governments.

"It's a blow. There's no question about that," Montgomery County Administrator Deborah Feldman said.

Huguely, 52, of Dayton, has put two of his children through college during his 31 years working for Delphi and GM and still has a child in high school. He worries that the brake plant where he and 1,600 fellow employees work will close instead of getting a new owner.

"It's going to have a tremendous impact on us," Huguely said. "You don't just move the jobs. You destroy a city. You destroy people's lives."

Co-worker Tony Henderson, 54, of Dayton, has 21 years of service.

"I was planning on working a few more years," Henderson said. "I'm mad as hell, but what can you do?"

Also in Detroit, a federal judge Friday approved a settlement requiring union retirees of General Motors Corp. to pay more for their health care.

U.S. District Judge Robert Cleland dismissed the objections of a group of retirees who said the settlement worked out by GM and the United Auto Workers violated their contracts.

Cleland noted that fewer than 1,250 people out of 476,000 people affected by the settlement objected to it and that the settlement would help keep GM a viable company.

"The delay and risks of litigation have an impact not only on GM, UAW and the Class, but also on the families, businesses and communities that depend on GM's continued competitiveness and viability," he wrote. "Those interests are advanced by the Settlement Agreement."

Under the agreement, reached by GM and the UAW last fall, hourly retirees would pay deductibles, premiums and co-payments for the first time, up to $752 annually for families and $370 for individuals. Those amounts could rise in the next few years.

The agreement requires active GM hourly workers to contribute $1 per hour in future pay increases to a new fund to help pay for retirees' coverage. GM would contribute $3 billion to that fund through 2011.