Union Clout Softens Blow at Delphi

As Delphi Corp. struggles to emerge from bankruptcy, IUE-CWA members at the Michigan-based auto parts supplier have ratified a four-year agreement with financial options that include retirement, buy-outs and buy-downs to offset wage cuts.

"We have provided significant and meaningful options for our members as they strive to survive this difficult period," IUE-CWA President Jim Clark said. "Our local leaders who make up the national bargaining committee made the best out of what was a deplorable situation."

The contract covers about 2,000 workers. Delphi also reached agreements with the Machinists, IBEW, Operating Engineers and Steel-workers, covering another 2,000.

Delphi had been dragging its feet in negotiations until IUE-CWA notified the company July 20 that it intended to terminate its contracts, a move that could have led to a strike this fall.

In August, investors pumped $2.55 billion into Delphi, putting it a step closer to emerging from bankruptcy. The drastic restructuring plan calls for closing 21 of its 29 plants in the United States and slashing 80 percent of its workforce.  "We will lose 5,500 jobs in the IUE-CWA Automotive Conference Board alone," said Willie Thorpe, chief negotiator and conference board chairman.

Among the sites expected to stay open, however, are three plants that employ IUE-CWA members, in Warren, Ohio, and Clinton and Brookhaven, Mass.  

IUE-CWA's battle at Delphi led to numerous court filings, with the union winning several stays against the company's attempts to void its labor agreements. IUE-CWA also won a seat on the court's creditors committee. Rallies, newspaper ads to build community support and letters to Delphi from members of Congress helped put pressure on the company.

In June 2006, the union reached an agreement with Delphi and General Motors for so-called "soft landings" for several thousand members through early retirements and buyouts of up to $140,000 for workers with at least 10 years seniority. Those provisions are part of the final pact. GM also agreed to honor an earlier agreement to underwrite pensions for Delphi retirees.

Thorpe said U.S. workers are competing against the low wages that Delphi is paying workers in Mexico, China and India. Even so, the new contract will give IUE-CWA members a 3 percent base wage increase in December and a 3 percent lump sum payment in December 2008 and 2009.

"The hedge funds buy companies like Delphi because they will get to lower wages and benefits," Thorpe said. "They could care less about the harm they're doing to the working families of America."