Delphi Bankruptcy: Judge OK's Salary and Bonus Severance For Execs...Pay Cut For Hourly Workers
But First Snide's Remarks: Are the 21 Delphi execs qualified for this severance pay and bonus' the same managers that helped lead Delphi into its present disturbing financial situation...wouldn't Delphi be better off to have these "execs" immediately take jobs with Delphi's competitors? How can a team of lawyers from the UAW allow this to happen? What was the Judge's justification to place more burden of long-term mismanagement on labor? Let me know what you think, msnide@theautochannel.com.
CHICAGO, Nov 5, 2005; Reuters reported that bankrupt auto parts maker Delphi Corp. won court approval to offer improved severance packages to 21 top executives, a company spokeswoman said on Saturday.
Judge Robert Drain of U.S. Bankruptcy Court in New York on Friday approved the new agreement to offer compensation to the executives if Delphi fires them or they leave for good reason, spokeswoman Claudia Baucus said. The compensation includes 18 months of salary and 18 months of bonuses, up from 12 months.
Delphi on Oct. 8 filed the biggest bankruptcy in U.S. automotive history and said it must slash U.S. hourly wages and benefits to levels paid by rivals and make significant cuts to its North American operations to emerge from court protection.
Under the new agreement, Delphi executives do not qualify for the new benefit unless they sign a document that bars them from immediately joining a competitor, Baucus said.
The company's hourly workers, many represented by the United Auto Workers union, had opposed the agreement in light of the drastic cuts they have been asked to take. Those cuts include reducing base pay to $9.50 per hour from about $27.50, closing several plants and laying off workers.
Delphi, based in Troy, Michigan, also plans to ask the court on Nov. 29 to approve a plan to pay executives annual bonuses during the reorganization and to make cash and equity payouts upon its successful exit from bankruptcy, which it expects by mid-2007.
