Delphi Reaches Labor Deal With UAW, GM

Delphi Corp. said Friday it had reached a tentative deal with the United Auto Workers and former parent General Motors Corp. intended to allow the auto parts maker to cut wages and emerge from bankruptcy.

The deal, which must be ratified by UAW members and approved by federal bankruptcy court, would clear a major risk for former Delphi parent GM (down $0.43 to $35.53, Charts, Fortune 500), which remains Delphi's biggest customer and heads into its own high-stakes labor talks with the union next month.

Terms of the proposed contract were not disclosed but include one-time payouts from GM in exchange for lower wages, a person involved in the negotiations said.

Hourly wages at Delphi would run up to $18.50 per hour under the deal, the person said. That would be a steep cut from the roughly $27 per hour workers earn now, but up sharply from early Delphi demands to cut hourly wages to as low as about $10.


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EnnNorak - 6/27/2007 9:07:10 AM

+1 Boost

The UAW understands reality these days. I just hope that militant diehards don't screw things up. Employment is not just about foreign competition any more. Manufacturing plants will continue to become more and more automated and labor content will eventually dwindle to a single-digit percentage of the overall cost. The cost of capital for very expensive tooling will be the big issue of the future and will shake out the weakest companies.