Delphi plans to shed 20,000 jobs

DETROIT - Delphi, the largest US car-related company to file for bankruptcy, wants to eliminate more than 20,000 jobs and is not trying to reach an agreement on wages and benefits, union leaders say.

A proposal Delphi calls its final offer would trim the union workforce in the US to about 10,000, from 33,650 now, United Auto Workers President Ron Gettelfinger said in Detroit yesterday. The offer "is an insult and we will not ask the locals for a vote".

Delphi, the largest US car-parts maker, filed for court protection on October 8 for its US operations after chief executive Steve Miller failed to win concessions from unions and financial aid from General Motors.

Miller has said he will ask the bankruptcy court to let Delphi impose terms if unions do not agree to pay and benefit reductions before December 16.

"Miller, by taking such a visible and hard line, may have underestimated the UAW," said labour professor Harley Shaiken at the University of California at Berkeley.

"The union would like to see a settlement, but not at the cost of 60 years of gains."

Delphi's proposal would provide US$21 ($30) an hour in wages and benefits. That is about a third of the rates Delphi inherited when GM spun off the parts supplier in 1999.

The UAW is the largest of six unions in Mobilizing@Delphi, a coalition formed on November 3 to fight the company's plans to cut wages and benefit for their members while paying bonuses to executives.

The unions would have the right to strike if the bankruptcy court voids their contracts with Delphi, Gettelfinger said. The UAW represents 24,000 Delphi workers.

Miller last month asked the UAW to accept wage cuts to as little as US$9.50 an hour from US$27.50 and reduced pensions and other benefits. Delphi has not made an annual profit since 2002 and has reported net losses of US$1.53 billion in this year's first three quarters.

The executive compensation plan proposed by Miller calls for 486 executives to receive about US$88 million in cash once a reorganisation plan is completed or assets sold.

The top four executives could receive US$1.98 million to US$2.75 million.

A second plan provides a 10 per cent stake and shares in the reorganised company to 595 executives.

- BLOOMBERG