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DPH UAW Offer

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Delphi Offer: $9 An Hour by Bill Vlasic

Ailing supplier lowers bid to UAW; workers asked to pay up to $5,000 yearly for health care. Delphi Corp.’s first offer to unionized autoworkers since filing for bankruptcy protection calls for an unprecedented elimination of benefits and even steeper wage cuts than an earlier proposal made by Chairman Robert S. “Steve” Miller.

Instead of the $10 to $12 an hour that Miller said Delphi should pay its production workers, the company started talks with the United Auto Workers last Friday by seeking wages as low as $9 an hour, according to a copy of the proposal posted on union Web sites.

In addition, Delphi wants workers to accept:

• Huge increases in out-of-pocket health care costs and the reduction or elimination of pension benefits.

• The loss of vision and dental benefits, tuition assistance and child care subsidies.

• Reduced vacation days, paid holidays and overtime.

• The elimination of cost-of-living raises and profit sharing.

The new terms would take effect Jan. 1, 2006, and run through Jan 1, 2012.

Word of the proposal appears to have heightened tensions between Delphi and its union work force. The low-ball offer has stirred talk of possible strikes in Delphi’s U.S. factories, where the average wage is $26 an hour.

“There is no way the UAW is going to accept this,” said Skip Dziedzic, president of UAW Local 1866 in Oak Creek, Wis. “If Mr. Miller is looking for a fight, I think he is going to find one.”

Delphi has declined to comment on the contents of its Oct. 21 proposals to the UAW. But it acknowledged in the document posted that the cuts “are more significant than previously discussed.”

“There is no alternative,” the company said in the six-page proposal. “Unless Delphi can transform its U.S. operations, they will cease to exist, resulting in even greater hardship for employees, retirees and families.”

The UAW represents 24,000 Delphi workers; the International Union of Electrical Workers has 8,500 members at Delphi.

UAW: ‘Total lack of concern’

UAW President Ron Gettelfinger also declined to provide details, but said Friday that “Delphi’s proposal displays a total lack of concern about the impact it would have on Delphi workers, their families, their communities and our nation.”

Union members were stunned by Delphi’s proposal to modify a health care plan that currently provides medical coverage nearly free of charge.

Delphi wants rank-and-file workers to accept “out-of-pocket” expenses of $2,500 a year for an individual and $5,000 for a family. Under the plan, workers would have to pay monthly premiums of up to $240 and deductibles of up to $1,800. Prescription drug costs would increase to $10 for generic and between $20 and $40 for name-brand drugs.

Those figures are far beyond what UAW officials recently agreed to with General Motors Corp. in their health-care deal announced last week. At GM, for example, UAW retirees are being asked to bear out-of-pocket expenses of $370 a year for an individual and $752 for a family.

Delphi’s pension plan would be frozen and accept no new participants after Jan. 1, according to the proposal. Delphi also said it may terminate the pension plan.

In the weeks leading up to Delphi’s Chapter 11 bankruptcy filing on Oct. 8, Miller repeatedly said the company had to pay its U.S. factory workers wages more comparable to those of its non-union competitors.

But with a court-imposed deadline of Dec. 16 to work out contracts with the UAW and the International Union of Electrical Workers, the sides seem far apart.

“It looks like (Miller) is trying to provoke a strike,” said Gregg Shotwell, a worker at Delphi’s plant in the western Michigan town of Coopersville. “Before it was $10 to $12 and people were like, whoa. Now it’s $9 or $10.”

Analyst says strike likely

One Wall Street analyst said Tuesday that a strike appears “very likely” based on the initial reaction by UAW members to Delphi’s proposal.

“According to the local UAW president we spoke with, a strike is very likely at this juncture,” said Bradley Rubin of the investment firm BNP Paribas. “He noted that the morale among his members is at an all-time low even before they received this proposal.”

Under the schedule set by U.S. Bankruptcy Judge Robert Drain, Delphi and its unions have until Dec. 16 to agree on wage and benefit contracts. If the sides are at a stalemate, Miller has said he will ask the court to void its current pacts with the UAW and IUE.

If the contracts are tossed out by the court, the unions then have a right to strike Delphi.

A strike not only would cripple Delphi’s U.S. operations, but also would immediately disrupt production at GM, Delphi’s biggest customer.

“A prolonged Delphi strike would be devastating to GM,” said Rubin. “Production would almost completely shut down because of the lack of essential parts from Delphi.”

UAW spokesman Paul Krell could not be reached for comment Tuesday. A Delphi spokeswoman declined comment.

Strike is last resort

Local union leaders said the UAW would strike Delphi only as a last resort.

“The UAW always does its best not to get into a position to go on strike,” said Dziedzic, whose local represents 484 workers. “We will do everything we can. But you can’t bring an autoworker in America a $10-an-hour job. There is just no way.”

In its Chapter 11 filing, Delphi cited uncompetitive labor costs as the principal reason for its bankruptcy. The Troy-based supplier, which was spun off from GM in 1999, lost $741 million in the first half of the year.

And while Miller has said Delphi needs huge wage reductions, he added that he understood the anger of rank-and-file workers.

“They pursued the American dream and globalization has swept over them,” Miller said at an Oct. 12 news conference.

From http://futureoftheunion.com/
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I'm sorry but that is way to aggresive. You can't expect someone that is used to getting paid 20-some bucks and hour to just go to $9 and then have to accept $240 per month on insurance and other expenses and still be able to afford their current bills. That's not a restructering of ones assets, that's restructuring one's life. I can understand going from mid $20's to high $teens and hour and taking away some benefits and vacation time (6 weeks to 4 weeks is no big deal at all), but to get McDonalds wages with no benefits and no cost of living increase is just not right. Might as well just fire everybody and start hiring immigrants. Delphi just shot themselves in the head with that offer. Workers are an asset to a company... if you can't afford to pay them, then you shouldn't be in business. Our gov't is the one allowing all the overseas outsourcing that is hurting and killing so many domestic businesses... and I'm not saying unions are right, but you can't just point your finger strictly at the union.
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I haven't seen anything that demonstrates that the government is culpable for any of this. It's a globalized economy, this is part of it. The UAW is going to squeal, but Miller is only being candid. He can fill those domestic plants with new hires, just like NWA filled found new techs when the union told its workers to strike. Not pleasant....inevitable.
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I haven't seen anything that demonstrates that the government is culpable for any of this.  It's a globalized economy, this is part of it.

The UAW is going to squeal, but Miller is only being candid.  He can fill those domestic plants with new hires, just like NWA filled found new techs when the union told its workers to strike.

Not pleasant....inevitable.

[post="34522"]<{POST_SNAPBACK}>[/post]


I'm no expert in labor relations, but what I read into all of this is that IF Delphi and the UAW don't come to an agreement by December (and it looks like they won't....I don't see Delphi loosening up any) then most likely Delphi's attempt to get the court to throw out the contract will be successful.

Then, I see the UAW striking....

THEN....with no contract binding them, I see Delphi wasting no time in issuing an ulitmatum. Stop the strike and accept Delphi's terms....or striking workers will be fired...

Delphi will have no problem filling employee vacancies with new hires....

Guys and gals, it's a new world now and while the REST of the country's economic sectors have already adapted or begun to adapt to the new economic reality in the U.S., the Delphi/UAW situation is the first sign of what we can expect to begin happening to the rest of the domestic automobile industry....
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"In the global economy, workers are going to be exploited," he said. "And just because they're Americans doesn't mean a big corporation won't try to pay the least amount that people are willing to work for." Key word: Willing. If they are willing, the are not being forced.
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I'd vote to strike! You can find more pay and better benefits elsewhere. Let's see Miller ups his offer after they start shutting down GM plants.
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I'd vote to strike! You can find more pay and better benefits elsewhere.
Let's see Miller ups his offer after they start shutting down GM plants.

[post="34529"]<{POST_SNAPBACK}>[/post]


Miller doesn't have to BUDGE....it's a different game now.

UAW strikes? The court will most likely nullify the UAW contract.....leaving Miller free to fire as he sees fit....

In this context, a strike means NOTHING to the UAW....
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I understand, but if I was working there and that offer was given to me ... I wouldn't take it. Knowing that he can hire replacement workers, wouldn't change my mind. His offer is rediculous. With schedules so close to the assemly plants, he won't be able to supply parts with replacement workers soon enough. And he knows it.
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Because it is a global economy, the accountibility must be shifted. The parties involved have moved past the company vs. Union argument. The war is now the U.S. vs. the World. The burden must be shifted. We as a country are losing by being sold out. We are becoming 3rd world. If everyone says "Great, now the Union must accept $9 an hour, let's be happy." Then we all must be happy with $9 an hour country wide, occupation wide. I believe nobody deserves $9 an hour. We must all demand a higher standard of living rather to keep this country as the standard for that the world aspires to rather than infighting amongst ourselves. Why would you want your fellow Americans who were once the standard at $20/hour to move towards 3rd world when we should all be demanding stronger foreign policy to protect us all and make that the standard for everyone? The small minded folks here should be ashamed and rather than put down their fellow American, should be pissed that they are not receiving the same benefits for their hard work and direct their demands at the government. It is time to take the argument to the government and demand that we be as strong as the other countries in their demands. Don't think of it as being auto workers/Union being strong and you the jealous person as being weak, think of it as China, India being the strong player and the U.S. being the weak player. We as a country must get jealous of other countries, not of each other. Infighting won't make us feel better because if we keep shooting each other down, our wages will ALL SUCK and the other countries will continue to rise. Let's not go backwards in all that we fought for to be great, to have the American Dream that other countries are jealous of our middle class. Edited by KillFort
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I understand, but if I was working there and that offer was given to me ... I wouldn't take it.
Knowing that he can hire replacement workers, wouldn't change my mind. His offer is rediculous.
With schedules so close to the assemly plants, he won't be able to supply parts with replacement workers soon enough. And he knows it.

[post="34535"]<{POST_SNAPBACK}>[/post]



You just do not get it. Current DPH employees are currently over paid for the job they do according to the rest of the supply industry. Other suppliers in the US do not pay 20 - 30 an hour for labor.

There are bigger issues at stake other than pay for the DPH workers. If they strike, they could loose everything. That means their retirement. I will venture to say that 70%+ of the current work staff is elligible to retire today. At least right now they have a fighting chance to keep all or a significant part of that.

Yes, if DPH strikes, this could close GM, Ford and other manufactures that rely on DPH parts. What does that gain them. Do you think that those manufacturers will not demand even great consession from the UAW. More unilateral action on retirement healthcare cuts. If DPH strikes, the day of reckoning will take place and it will be ugly. And I assure you GM, Ford, DPH Visteon will be left standing.

Todays business model just does not work anymore and it will change.
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Evok, I know what your saying. Today is different than it was 20 years ago, but things didn't change so much and so fast over night that 2 1/2 years ago the UAW and GM agreed to a contract and then the next thing you know Delphi files for bankruptcy? China has opened their doors to industry, and industry can't wait to get there. WE not the UAW, but WE as in AMERICA, are going to suffer.
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This is getting crazy, where does it stop? I used to hate the UAW but now I am more behind them because of the ridiculous demands made by managment. Before the UAW had ridiculous demands and now it is managment. The union should not accept anything more then a 20% reduction in wages, however they need to pick up more of the health insurance tab. This just goes to show that our country needs medical reform. Physician salaries are the ones that need to be cut and there needs to be more price regulation of the healthcare industry. This will help the US companies without needing to adopt a national healthcare system. We as Americans are in for a shock. I don't care if you are a line worker, middle managment or a professional. Our way of life is about to radically change.
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Simon C, thank you. I just don't know why so many people in this country are turning their heads the other way that health care and wages going down is a good thing. Do they think that by doing so they might get a larger part of the pie or something? Do they think that will make them more secure because everyone is getting a sh*ty wage? WRONG. If one group of workers loses their standard, those jealous people will be next. For instance, let's say $20/hour is the standard for group one and group two is getting $9/hour. Then let's say group one, (i.e. Delphi) goes down to $9. You think group two will stay at $9? Hell no! The company that group two works for will see that as the new standard and lower the employees down to $6 or just close shop because it's not even worth doing business anymore. They will be able to do it too because there won't be any Unions. The whole hierarchy of the middle class will continue to slide down. This country is becoming a joke. We used to own 2/3 of the world's wealth. That's what I call the standard of the world! Meanwhile, other countries will continue to laugh all the way to the bank with their nationalistic pride (i.e.) Japan and protective laws and look at how dumb we are for infighting with each other and not taking a stand to them. By that point it will be too late. Looks like it already is. It's dumb to take a stand against each other when we should be taking a stand to India, China and Japan. When China started hurt Japan, they got pissed and made some laws to protect themselves. Meanwhile, we just whine about our neighbor making more money? How lame is that? Let's complain that our neighbors across the ocean are doing better than us not that our neighbor down the street is. That's just too small minded in scope in this so called "Global Economy". Who has the answer? We do, as the citizens of the United States, to tell Washington that this country is heading full speed in the wrong direction. We need to keep this country great! We need national health care reform and protecting of our companies against the global threat. We were once the envy, now we are becoming the joke. Edited by KillFort
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Evok,
I know what your saying. Today is different than it was 20 years ago, but things didn't change so much and so fast over night that 2 1/2 years ago the UAW and GM agreed to a contract and then the next thing you know Delphi files for bankruptcy? China has opened their doors to industry, and industry can't wait to get there.
WE not the UAW, but WE as in AMERICA, are going to suffer.

[post="34565"]<{POST_SNAPBACK}>[/post]



Blame can go around. The OEM's should have never agreed to the level of wage increases and retirement/health obligations they did over the past 20 years. Never. This should have been nipped in the bud years ago and this DPH thread would not be here today.

Once thing is for certain, does anyone here honestly think GM could have spun off DPH and demanded modest salary concession from the UAW back in 1999 much less what is proposed today. No way.

This is about 20 years of appeasing the union and agreeing to unreasonable demands. This is a reality check for the UAW. The OEMs backs are up against a wall.

Blame can go around and around and will not move this discussion forward. We have to deal with today not what happened yesterday.

The OEM's have taken just about all the structural costs they could out of their businesses. The auto industry is in a price depression and the only place left to cut costs, that has not been touched is the UAW fixed cost. Those are the realities if you are at the top of these companies. In the 25 years of GM's restructuring, the only aspect that has not been touch is the UAW labor. Edited by evok
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Doesn't anybody care about the issue of build quality? It seems like the choice here is either, have parts made by angry UAW workers making $9 an hour, or fire them all and have parts made by people who have never done manufacturing work before and took the job because the pay was $1 higher than they used to make at Wal-Mart. That doesn't bode well for the quality of future GM cars and parts, IMO. There seems to be a perception that the labor you get for $30/hr is really exactly the same as the labor you get for $9/hr, only more expensive. -Andrew L
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The issue is very complicate and long running. Much of it comes down to Americans being patriotic of everything but our manufactured goods. We have let our electronics industry die, we are losing our automobile industry and that will be the death knell for the middle class. We want our products cheap and good, regardless of where they come from. I have been to places where people will pay a premium for local made goods that may not be as good. How else do you explain Renault, Citreon and Pugueot :-> If you look at the bigger picture, you will find that if these wage cuts stick then the buying power of this group falls by around $300K per hour. $2.4 Million per workday. Imagine the economic fall out from that to all of the associated persons (cleaners, dealers, stores, diners, phone providers, etc.). Imagine the drop in income taxes and increase in bankruptcies (under this new corporate slanted law). The affects to all will be chilling. Now also imagine a Delphi strike, GM would stand the possibility of being idled for quite a while. This could be devastating. I think Delphi could be less draconian in their implementation, 20% wage cuts until some performance metric is met. If we make money, you make money (continue profit sharing). No wage increases for a specified period of time, Vision and dental but with premiums and deductibles (reasonable ones).
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I'm sorry but that is way to aggresive. You can't expect someone that is used to getting paid 20-some bucks and hour to just go to $9 and then have to accept $240 per month on insurance and other expenses and still be able to afford their current bills. That's not a restructering of ones assets, that's restructuring one's life. I can understand going from mid $20's to high $teens and hour and taking away some benefits and vacation time (6 weeks to 4 weeks is no big deal at all), but to get McDonalds wages with no benefits and no cost of living increase is just not right. Might as well just fire everybody and start hiring immigrants. Delphi just shot themselves in the head with that offer.

Workers are an asset to a company... if you can't afford to pay them, then you shouldn't be in business.

Our gov't is the one allowing all the overseas outsourcing that is hurting and killing so many domestic businesses... and I'm not saying unions are right, but you can't just point your finger strictly at the union.

[post="34513"]<{POST_SNAPBACK}>[/post]


Very good point. A pay cut can hurt, but it can be dealt with. Asking workers
for a cut like that-they are not even going to have time to adjust. Workers are
not even going to be able to afford their house payments on wages that low.
You might as well be working at Wal-Mart. Heck, I know part time people
in retail going though college making a bit more than 9 bucks an hour.


Either way, this isn't looking good for Delphi. I stick with my prediction that
they will be gone in a few years...no matter which way you look at it, there
is simply no way to win....
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I haven't seen anything that demonstrates that the government is culpable for any of this.  It's a globalized economy, this is part of it.

The UAW is going to squeal, but Miller is only being candid.  He can fill those domestic plants with new hires, just like NWA filled found new techs when the union told its workers to strike.

Not pleasant....inevitable.

[post="34522"]<{POST_SNAPBACK}>[/post]


Yeah, he may have found new techs, but they still make well more than 9
bucks an hour....
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I'm no expert in labor relations, but what I read into all of this is that IF Delphi and the UAW don't come to an agreement by December (and it looks like they won't....I don't see Delphi loosening up any) then most likely Delphi's attempt to get the court to throw out the contract will be successful.

Then, I see the UAW striking....

THEN....with no contract binding them, I see Delphi wasting no time in issuing an ulitmatum.  Stop the strike and accept Delphi's terms....or striking workers will be fired...

Delphi will have no problem filling employee vacancies with new hires....

Guys and gals, it's a new world now and while the REST of the country's economic sectors have already adapted or begun to adapt to the new economic reality in the U.S., the Delphi/UAW situation is the first sign of what we can expect to begin happening to the rest of the domestic automobile industry....

[post="34526"]<{POST_SNAPBACK}>[/post]



Let's hope not, because if everyone becomes to accepting on things like this
happening, then everyone will try it, NO matter where you work, or what you
do...

If it is that easy, we as workers are in trouble....
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Miller doesn't have to BUDGE....it's a different game now.

UAW strikes?  The court will most likely nullify the UAW contract.....leaving Miller free to fire as he sees fit....

In this context, a strike means NOTHING to the UAW....

[post="34533"]<{POST_SNAPBACK}>[/post]



Yes, true, but at this point the workers have nothing to lose (not like they couldn't
get paid that at wal-mart), So I say-Why not?
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Because it is a global economy, the accountibility must be shifted.

The parties involved have moved past the company vs. Union argument.  The war is now the U.S. vs. the World.  The burden must be shifted.  We as a country are losing by being sold out.  We are becoming 3rd world.  If everyone says "Great, now the Union must accept $9 an hour, let's be happy."  Then we all must be happy with $9 an hour country wide, occupation wide.  I believe nobody deserves $9 an hour.  We must all demand a higher standard of living rather to keep this country as the standard for that the world aspires to rather than infighting amongst ourselves.  Why would you want your fellow Americans who were once the standard at $20/hour to move towards 3rd world when we should all be demanding stronger foreign policy to protect us all and make that the standard for everyone?  The small minded folks here should be ashamed and rather than put down their fellow American, should be pissed that they are not receiving the same benefits for their hard work and direct their demands at the government.

It is time to take the argument to the government and demand that we be as strong as the other countries in their demands.

Don't think of it as being auto workers/Union being strong and you the jealous person as being weak, think of it as China, India being the strong player and the U.S. being the weak player.  We as a country must get jealous of other countries, not of each other.  Infighting won't make us feel better because if we keep shooting each other down, our wages will ALL SUCK and the other countries will continue to rise.  Let's not go backwards in all that we fought for to be great, to have the American Dream that other countries are jealous of our middle class.

[post="34543"]<{POST_SNAPBACK}>[/post]



Good point.
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Yes, true, but at this point the workers have nothing to lose (not like they couldn't
get paid that at wal-mart), So I say-Why not?

[post="34607"]<{POST_SNAPBACK}>[/post]



There pensions. As I have said earlier a significant majority of these worker are eligible to retire.
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