Negotiations between U.S. automaker General Motors, Delphi and the United Auto Workers (UAW) union to reform Delphi’s work force outside of bankruptcy court have hit a road block according to a report in the online edition of Thursday’s Wall Street Journal.
The stalled negotiations raise doubts about whether GM and the UAW can bring about “soft landing” for thousands of Delphi workers whose jobs and pay are at risk the newspaper reported.
The talks between the three entities is being watched closely on Wall Street to see how challenging it could be for GM to reduce its U.S. work force.
GM and Ford, the nation’s two biggest automakers, are in the midst of a massive and agonizing reorganization, hobbled by a shrinking domestic market share, plunging profits, and the high wages and generous health benefits promised to their existing and former workers.
The discussions also have stalled over concerns that Delphi workers will not agree to transfer back to GM the Journal reported. GM spun off its Delphi parts unit in 1999, but kept responsibility for many Delphi workers. UAW officials also are concerned about how much or how long GM is willing to subsidize compensation for Delphi workers who could see their pay and benefits slashed the newspaper said.