Good News in June 18, 2006 Wall Street Journal

Delphi Reaches Buyout Agreement With Union, GM for Hourly Workers

Associated PressJune 18, 2006 11:30 a.m.

DETROIT -- Delphi Corp. has reached an agreement with its second-largest union and General Motors Corp. to offer buyouts to hourly workers that is similar to an earlier deal with the United Auto Workers union.

The auto parts supplier announced the agreement with the International Union of Electronic Workers-Communications Workers of America and GM, Delphi's former parent and its largest customer, late Friday.

"We continue to be focused on the transformation of Delphi and this attrition plan provides a stronger framework to position our successful emergence from Chapter 11," Delphi President and Chief Operating Officer Rodney O'Neal said in a statement. "This plan further enables an effective transformation of our U.S. manufacturing and support operations."

Delphi said the deal was an important step in its restructuring.

GM has agreed to provide financial support under the proposed plan, which is subject to bankruptcy court approval, Delphi said. GM spokeswoman Toni Simonetti said Saturday that the automaker will split the cost with Delphi.

"This is just another good step in reaching a consensual resolution in the Delphi bankruptcy and restructuring situation," Simonetti said. "We're pleased with that."

About 8,000 hourly workers represented by the IUE-CWA are eligible to participate. Some may be offered a lump sum payment of $35,000 to retire, Delphi said, while eligible employees may decide to accept buyout packages ranging from $40,000 to $140,000.

The plan also permits the transition of up to 3,200 Delphi workers represented by the IUE-CWA to GM for retirement purposes, Delphi said.

Messages seeking additional information were left Saturday with Delphi and the IUE-CWA.

Delphi filed for Chapter 11 bankruptcy protection in October. The buyouts are part of an effort to provide early-retirement incentives to Delphi workers as the Troy, Mich.-based company seeks to cut its work force.

Earlier this month, Delphi announced a deal with the UAW and GM to offer buyouts to all hourly employees. Those buyouts greatly expand early-retirement incentives announced in March and meant that all UAW-represented employees will be offered something if they want to leave the company.

The UAW -- the largest of Delphi's six unions -- represents about 22,000 of Delphi's 31,000 workers. At the time, Delphi said it was negotiating with other unions to offer similar packages for their members.

GM and Ford Motor Co. also are working to trim their work forces. (See related story.) GM, which offered buyouts to all of its 113,000 U.S. hourly workers, plans to cut 30,000 jobs and close 12 facilities by 2008. And Ford announced in January it would cut up to 30,000 jobs and close 14 facilities by 2012.

Last week, UAW officials said about 25,000 GM workers and 8,500 from Delphi have agreed to take buyout or early-retirement offers. On Saturday, Ford spokeswoman Marcey Evans said the automaker expects 10,000 to 11,000 of its union workers to take early-retirement or buyout offers this year.