Delphi Announces Sweeping Reorganization Plan

Washington DC March 31, 2006; The AIADA newsletter reported that auto parts supplier Delphi announced this morning a massive reorganization plan which includes plant closings and a motion to cancel labor contracts and retiree medical benefits, reports The Wall Street Journal.

Filing the labor motion increases the urgency of Delphi and its unions to make a deal and prevent a strike. Any official labor action would likely be held off until the motion is granted and Delphi imposes its own terms, a process that will take until June, according to the paper. Delphi's two biggest unions, the UAW and IUE-CWA, expect to continue negotiations with Delphi until that process is complete.

Delphi supplies about $15 billion in parts to GM and about $13 billion to other customers, including Toyota Motor Corp.