Bankrupt Delphi Wants To Continue Executive Bonus's - Union Protests- Duh

CHICAGO, July 12, 2006; Reuters reported that unions representing hourly workers at bankrupt auto parts supplier Delphi Corp. on Wednesday objected to the company's plans to extend an executive bonus program to the second half of 2006.

Delphi, in talks with its unions over proposed steep wage and benefit cuts, has said it must have the payments to remain competitive on compensation and the program had a maximum $36.3 million payout for the first half of the year.

Troy, Michigan-based Delphi wants the U.S. Bankruptcy Court for the Southern District of New York to approve a second-half 2006 plan and allow plans for each successive six-month period Delphi remains in Chapter 11. A hearing is set for July 19.

Extending the plan is unnecessary and "would certainly complicate the collective bargaining negotiations ...," the International Union of Electrical Workers-Communications Workers of America said in a court-filed objection.

Delphi, which filed for bankruptcy in October 2005, plans to cut four-fifths of its 33,000 U.S. hourly workers, close or sell 21 of 29 U.S. union plants, and cut up to 8,500 salaried employees to reorganize in North America. The IUE-CWA and the United Auto Workers represent most of those union workers.

The former parts unit that General Motors Corp. spun off in 1999 has reached agreements with the UAW and the IUE-CWA on early retirement incentives and buyouts, but not on wage and benefit cuts, which require ratification votes. It has reached no deals with unions that represent a handful of workers.

"Granting the motion will antagonize these workers, destroy their morale, turn them against any meaningful concessions, and thwart the very process on which debtor focuses the Chapter 11 proceeding," the IUE-CWA said.

Delphi's first-half performance far surpassed the targets it set for the bonus plan and the second half plan has easily achievable targets also, the IUE-CWA said, adding that bonus plans should be delayed until Delphi exits bankruptcy.

"The fortunes of top management have improved at precisely the same time the debtors have moved forward with plans to put most of their unionized employees out of work and to slash the wages and benefits of the survivors," the United Steelworkers said in an objection.