Delphi Asks Judge to Void Labor Contract

Delphi, the nation's largest auto-parts supplier, asks a federal bankruptcy judge to void its labor contract with the United Auto Workers Union. The UAW has warned that its members may strike if the judge approves Delphi's request. Delphi is General Motors' biggest supplier and a strike could cripple the struggling auto giant.

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From NPR News, this is ALL THINGS CONSIDERED. I'm Michele Norris.

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And I'm Melissa Block.

A showdown is taking shape in the auto industry. Today, the giant auto parts maker Delphi laid out its plans in bankruptcy court. After months of negotiations with labor unions, the company asked the court for permission to cancel its existing labor contracts. Delphi also presented a restructuring plan that calls for the closure or sale of most of its American plants.

As NPR's Jack Speer reports, tension between the company and its workers is heating up.

JACK SPEER reporting:

Delphi's bid to cancel its labor contracts did not come as a surprise. It's been threatening the move for months now and has put it off several times in order to let negotiations continue. But today it decided to step up the pressure by announcing plans to shutter or sell more than 20 plants in the U.S. Lindsey Williams, a Delphi spokesman, says the company needs to see some progress.

Mr. LINDSEY WILLIAMS (Spokesman, Delphi): We've been at this since October. It is not our plan to stay in Chapter 11 forever, but we cannot continue to talk forever either. So to that end we're filing the motion today. The talks will continue. At least we plan to continue the talks. GM will be at the table. We will be at the bargaining table. We're hopeful that our unions remain at the bargaining table so that we can reach a consensual deal.

SPEER: Delphi has said without significant salary cuts from its hourly workers and a much reduced cost structure, there is no way the company can emerge from bankruptcy, let alone compete with low-cost foreign manufacturers. But union leaders denounced Delphi's actions even before the filing, accusing the company of using the court to circumvent the bargaining process. Ted Strickland, a Democratic congressman from Ohio's 6th District, where at least one of the plants targeted for closure is located, agrees.

Representative TED STRICKLAND (Democrat, Ohio): This is another example of where the workers basically are given the short end of the stick and the company uses a bankruptcy law in order to avoid their commitments and their obligations. It's a sad day.

SPEER: And some who follow labor issues say with the actions taken by Delphi, things could heat up between the parties pretty fast.

Mr. GARY N. CHAISON (Graduate School of Management, Clark University): I don't see a happy ending to any of this.

SPEER: Gary Chaison is a professor of labor relations at Clark University. He says union members reading the list of plants to be closed or sold by Delphi may feel they have little to lose by going on strike.

Mr. CHAISON: There's a very well organized and militant movement within the United Auto Workers, and particularly the Delphi locals, to not accept any more concessions no matter what the cost will be. And I think that this is something that Delphi is going to have to consider.

SPEER: If there is a strike at Delphi, it won't happen until June, when the court rules on canceling the contracts. General Motors is especially vulnerable. It lost more than $10 billion last year without any strikes. GM spokesman Jerry Dubrowski.

Mr. JERRY DUBROWSKI (Spokesman, General Motors): Nobody wins if there's a strike. And we all recognize that. You know, it's not good for General Motors, it won't be good for Delphi and it certainly won't be good for the union.

SPEER: In addition to the other actions Delphi announced today, it plans to freeze pension benefits for both hourly and salaried workers. The company instead will offer a 401k plan.

Jack Speer, NPR News.

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