Delphi buyouts grow

[nadepalma]

Sorry if this is a repost -- I didn't see it posted anywhere yet.

Source: http://www.detnews.com/apps/pbcs.dll...606100342/1148

Delphi buyouts grows
Deal that covers all UAW workers could avert a strike
Brett Clanton / The Detroit News


The deal to expand an early retirement program signals Delphi and its largest union are getting closer to a wage and benefit agreement that could help the supplier emerge from bankruptcy by next year.

Delphi Corp. struck a deal with the United Auto Workers to offer cash buyouts and early retirements to lower-seniority workers, an important step toward reaching a broader labor pact that could head off a strike.

The agreement, announced Friday as UAW leaders prepare to convene Monday in Las Vegas, comes in addition to early retirement packages offered in March to 13,000 more experienced Delphi workers. All 24,000 UAW workers at the largest U.S. parts supplier are now eligible for a package to leave the company.

Under the pact -- first reported in The Detroit News on Tuesday -- Delphi is offering workers with fewer than 26 years on the job lump-sum buyouts ranging from $40,000 to $140,000. Accepting the check means walking away with no benefits except accrued pension credits.

The Troy-based parts maker is also lowering the eligibility requirement for the previously announced early-retirement program by one year to include workers with 26 years of service.

The expanded buyouts come amid a massive exodus of U.S. autoworkers taking packages to leave Delphi, General Motors Corp. and Ford Motor Co.

But the deal also provides new hope that bankrupt Delphi and the UAW can work through labor issues that once seemed intractable.

Delphi and the UAW said Friday that bankruptcy-court hearings on the supplier's request to void labor contracts have been pushed back to Aug. 11. The hearing had been scheduled to resume Friday.

This gives the two sides more time to work out a broader agreement on proposed wage and benefit reductions and appears to lessen the risk of a strike that could cripple Delphi and GM, Delphi's biggest customer and former parent.

Delphi's most recent proposal to the UAW calls for workers to take a pay cut from about $27 an hour to $22 an hour initially and then to $16.50 an hour. That offer assumes a $50,000 bonus subsidized by GM in exchange for price breaks from Delphi. If GM does not offer financial assistance, Delphi has said it wants to cut wages to $12.50 an hour.

Delphi also has said it wants to close or sell 21 of 29 U.S. plants, including several in Michigan.

If U.S. Bankruptcy Judge Robert Drain grants Delphi's request to ax the contracts and Delphi slashes wages, the supplier's six unions are virtually guaranteed to walk off the job.

The news Friday gives UAW President Ron Gettelfinger some breathing room heading into the union's constitutional convention Monday. Gettelfinger is almost sure to be re-elected to a second four-year term next week but is under pressure to protect workers from job and pay cuts.

"Delphi's decision to adjourn the hearings is a step in the right direction and the UAW supported the request for an adjournment," Gettelfinger and UAW Vice President Richard Shoemaker said in a joint statement Friday.

In late May, GM asked for a 60-day postponement so the sides could focus on the talks. It was turned down, but GM in the end got what it wanted, perhaps after exerting its leverage in the talks.

Delphi, which filed for bankruptcy protection in October, said it welcomed the extra time to negotiate.

"The court has advised the parties to continue efforts for a consensual resolution of the issues and work diligently toward an agreement outside of court," said Delphi Chief Restructuring Officer John Sheehan. "We remain committed to that outcome."

GM played a key role in the expanded attrition deal announced Friday. The automaker agreed to pick up half of the tab for the new Delphi buyouts and expanded early retirement offers.

With the buyouts added, Delphi's retirement incentives are nearly identical to those being offered at GM, which this spring extended exit offers to its 113,000 U.S. workers as part of a goal to eliminate 30,000 factory jobs by 2008.

One difference: A few hundred Delphi workers hired recently at a lower wage rate will be offered $40,000 to give up their jobs.

Under the historic agreement, GM said it would offer up to $35,000 and full benefits to workers with at least 27 years on the job and cash buyouts, ranging from $70,000 to $140,000, to lower-seniority workers. In the same pact, Delphi was allowed to offer early retirement packages to 13,000 UAW workers and send 5,000 workers back to GM.

As of early June, more than 20,000 GM workers and nearly 10,000 Delphi workers had signed up for the offers.

The expansion of Delphi's program to include buyouts likely will find even more takers, but will present hard choices for workers such as Ed Overstreet.

The 45-year-old skilled tradesman has 25 years on the job, but worries that a $140,000 buyout would not carry him to retirement. He said he would rather live with the uncertainty of Delphi's reorganization than hunt for a job in a bad economy.

"If I had 10 years in, and I was 35 years old, I'd think about it," said Overstreet, who works at a Delphi factory in Kokomo, Ind.

Overstreet and many others have filled out paperwork to "flow back" to GM, which is also in financial trouble after a $10.6 billion loss in 2005 but has so far managed to avoid bankruptcy.

The UAW said as of Friday, Delphi workers have been offered 1,105 flow-back jobs at GM.

Separately, Delphi said it is still negotiating terms of an early retirement program with the International Union of Electrical Workers-Communications Workers of America, United Steelworkers and its other unions.

Those unions represent 9,000 of the supplier's 33,000 U.S. hourly workers.

ABOUT THE DEAL
Lowers the eligibility requirement for early retirement to 26 years from 27. Those with 26-29 years will get wages of $2,750 a month until they reach 30 years.

Offers for the first time cash buyouts to workers not eligible to retire. They will get pension credits already earned, but agree to sever all other ties to Delphi.

Makes workers with 10 or more years of service eligible for a cash buyout of $140,000.

Offers employees with fewer than 10 years a cash payment of $70,000.

Makes workers who were hired since Delphi and UAW approved a wage scale that lowered pay for new employees eligible for $40,000.
Sources: Delphi, UAW

[steverino]

The 45-year-old skilled tradesman has 25 years on the job, but worries that a $140,000 buyout would not carry him to retirement. He said he would rather live with the uncertainty of Delphi's reorganization than hunt for a job in a bad economy.

You're 45 yrs old. Get another job or ask them to up the offer to $832,987.57

[mjd1001]

Originally Posted by steverino

You're 45 yrs old. Get another job or ask them to up the offer to $832,987.57

It's not what people want to hear...but you are going to have to get another job in a situation like this. I HOPE they aren't thinking "Will the money I get from this buyount be enough where I dont' have to ever work again, even at age 45".

The money you get from the buyout should be viewed as a supplement to make up for the difference you get from a job that pays less. You may not want to do it...but it is better than not having any job and no buyout (or a much smaller one) a few years from now.

[steverino]

Originally Posted by mjd1001

It's not what people want to hear...but you are going to have to get another job in a situation like this. I HOPE they aren't thinking "Will the money I get from this buyount be enough where I dont' have to ever work again, even at age 45".

The money you get from the buyout should be viewed as a supplement to make up for the difference you get from a job that pays less. You may not want to do it...but it is better than not having any job and no buyout (or a much smaller one) a few years from now.

From the tone of the article that was the way I interpreted it.

[goblue1999]

Originally Posted by steverino

You're 45 yrs old. Get another job or ask them to up the offer to $832,987.57

don't forget to tell him that the only place where the economy is bad is his area.....the rest of the country is booming.

Mr. Clampett, load up your truck and move.....

[mbukukanyau]

UAW is on its death bed.. if people want to work for the US manufactureres, they should look beyond the unions.. they endager their job security

[hotrod747]

I'm sure that one of the auto assembly plants in the area of Montgomery, AL will be happy to have him. That's if he's willing to relocate. Also, that area is really, really booming! Mercedes, Hyundai, and Toyota have assembly plants in that area.

[56 Starchief]

im anxious to see how many take it now

[eaton53]

Time to take the money and run. The alternative is likely to be getting nothing.

If my employer offered me $70K to quit (I'm a 47 y.o.) I'd be out. But I'm not a lineworker and could get another job that actually pays more than I make now.

I like my job and work relatively cheap, so I'm not expecting any severance offers... I've already survived 3 big layoffs since I've been there.

[95MonteCarlo]

Its an interesting concept. The question in the long run is, will the people who accepted the buyouts switch brands? I wonder.

[samkung]

i dont understand why auto worker get such high pay???
do they need a degree to build cars/parts??

[eaton53]

Originally Posted by 95MonteCarlo

Its an interesting concept. The question in the long run is, will the people who accepted the buyouts switch brands? I wonder.

I buy from whoever is paying the bills.
Were I working for Ford I wouldn't buy GM. It'd look like I didn't believe in my own work.

[Mikkoo]

Originally Posted by samkung

i dont understand why auto worker get such high pay???
do they need a degree to build cars/parts??

The high wages have been implemented when times were very good for the automakers. As long as the Big Three made substantial profits, it was ok to reward the line workers. The union was extremely strong, but that now seems to be in the past. The big test comes in 2008, when the labor agreement is up for renewal.

[jlt0x]

Originally Posted by mjd1001

It's not what people want to hear...but you are going to have to get another job in a situation like this. I HOPE they aren't thinking "Will the money I get from this buyount be enough where I dont' have to ever work again, even at age 45".

The money you get from the buyout should be viewed as a supplement to make up for the difference you get from a job that pays less. You may not want to do it...but it is better than not having any job and no buyout (or a much smaller one) a few years from now.

I agree. The DoN as well as other govt organizations went thru this type of situation a couple of years ago. The govt decided that it needed to downsize, so it offered sizable buyouts to senior-ranking employees. Many took the 1st buyout, while others balked at it. Six months afterwards, the govt offered another buyout, but it was roughly 50% of the what the 1st buyouts were. Those that balked thought the govt was going to offer more for them to leave but soon found out that the govt buyouts would continue to get smaller and smaller. There were people taking $25k to leave in a 3rd offering of the buyouts. Of couse, these buyouts allowed most of those accepting it to retain at least 80% of their pensions and keep their health benefits for a period afterwards.

[SJZ3]

Originally Posted by samkung

i dont understand why auto worker get such high pay???
do they need a degree to build cars/parts??

Having a degree does not mean you make more money, nor does making money require you to have a degree.

I know (specific) people with a Master's making ~35k a year, and people without any degree making ~100k a year.