Delphi Reaches Pact with GM, 2nd Union

CHICAGO, June 17, 2006; Reuters reported that bankrupt auto parts maker Delphi Corp. said it has reached an agreement with its second-largest union and General Motors Corp. on a buyout plan similar to its plan with the United Auto Workers.

About 8,000 Delphi workers represented by the International Union of Electrical Workers-Communications Workers of America would be eligible for the buyouts, Delphi said in a statement issued late on Friday.

GM has agreed to provide financial support under the proposal, which is subject to bankruptcy court approval. GM spun Delphi off in 1999.

Troy, Michigan-based Delphi filed for bankruptcy last October and plans to close 21 of 29 U.S. union plants as part of a broad restructuring. Delphi has said it must cut about four-fifths of its 33,100 U.S. hourly workers and slash wages and benefits of its remaining blue-collar work force to reorganize its operations.

Earlier this week, the United Auto Workers said 25,000 GM workers and 8,500 Delphi workers had accepted buyouts.

Under the IUE-CWA proposal, some U.S. hourly employees may be offered a lump sum payment of $35,000 to retire, Delphi said. Some employees may elect buyout packages ranging from $40,000 to $140,000.

The plan also permits the transition of up to 3,200 Delphi union workers to GM for retirement purposes.

"We continue to be focused on the transformation of Delphi, and this attrition plan provides a stronger framework to position our successful emergence from Chapter 11," Delphi President and Chief Operating Officer Rodney O'Neal said in the statement.

"This plan further enables an effective transformation of our U.S. manufacturing and support operations," he said.

GM has agreed to assume the financial obligations related to the lump sum payments for eligible Delphi hourly employees accepting normal or voluntary retirement incentives.

GM would also fund some post-retirement benefits for Delphi employees who transition to GM under the plan for purposes of retirement, as well as half of employee buyout costs.