Delphi Workers Brace for Changes After Bankruptcy Filing

SAGINAW, Mich. October 9, 2005; Tim Martin writing for the AP reported that Delphi Corp.'s bankruptcy filing has left its workers with an uncertain future as the nation's largest auto supplier tries to regain its financial footing.

The bankruptcy filing Saturday sent shock waves through a U.S. auto industry already weakened by high labor costs and falling market share. Spun off from General Motors Corp. in 1999, Delphi has 50,000 U.S. employees.

"There's not much we can do," said Tim Krzeszewski, 52, a sheet metal worker from Saginaw who works at a nearby Delphi steering plant. "It's kind of out of our hands."

Delphi filed for Chapter 11 bankruptcy in federal court in Manhattan to reorganize its U.S. operations. A judge allowed the company to continue operating and set more comprehensive hearings for Tuesday. Delphi's non-U.S. operations were not included in the filing.

Delphi Chairman and CEO Robert S. Miller said the company hopes to emerge from Chapter 11 in early to mid-2007.

Miller had threatened to take the company into bankruptcy if he failed to reach a restructuring agreement with GM and its largest union, the United Auto Workers, which represents about 24,000 Delphi workers.

UAW officials blasted Delphi's decision to file for bankruptcy one day after sweetening the severance packages of 21 top executives to help persuade them to stay at the company.

"Once again, we see the disgusting spectacle of the people at the top taking care of themselves at the same time they are demanding extraordinary sacrifices from their hourly workers, engineers, administrative and support staff, midlevel managers and others," union leaders said in a statement.

Delphi said it made the change after determining its severance package for top executives was not competitive.

The company asked the union for wage cuts of more than 50 percent, according to letters released by union leaders. Delphi wants to cut hourly wages from -- $27 an hour to $10 to $12 an hour and eliminate a jobs bank that gives full pay to 4,000 laid-off workers, the letters said.

Analysts have said they doubt Delphi can get such large-scale concessions without filing for bankruptcy.

Miller said Delphi will continue negotiating with GM and the UAW to lower its labor costs after the bankruptcy filing. Meanwhile, Delphi will continue to pay its workers and suppliers and will ship its products on schedule, he said.

Union halls have been flooded with calls from employees and retirees asking about their pension and health care benefits, but many workers do not expect any sudden changes now that a bankruptcy court will sort out the options.

"It's going to be business as usual on Monday," said Harry Johnson, 46, a skilled trades supervisor from Freeland. "We'll all go to work and do the best we can."

Delphi will finance its operations with $4.5 billion in loans, including up to $2 billion in debtor-in-possession financing from a group of lenders led by JPMorgan Chase Bank and Citigroup Global Markets Inc.

Based in the Detroit suburb of Troy, Delphi has struggled to make a profit since GM spun it off in 1999. It lost $4.8 billion in 2004 and nearly $750 million in the first half of this year.

Delphi, No. 63 on the 2005 Fortune 500 list of the country's largest corporations, had listed $17.1 billion in assets and $22.2 billion in debt in Saturday's bankruptcy petition.

Delphi has 31 plants in 13 states, including Michigan, Ohio, Alabama and California. The company has 185,000 employees worldwide.

Delphi Corp.: http://www.delphi.com

General Motors Corp.: http://www.gm.com

United Auto Workers: http://www.uaw.org

Associated Press Writer Ashley M. Heher in Indianapolis contributed to this report.