Auto supplier Delphi Corp. said Friday that it will delay for the third time an effort to reject its union contracts so it can continue talking with its former parent company General Motors Corp. and its unions.
Delphi, which filed for bankruptcy in October, had threatened to ask a bankruptcy court to reject its union contracts on Friday. The company said it will delay that filing and try to settle with GM and its unions by March 30. If no agreement is reached, Delphi said it will file a motion with the court on or before March 31.
The move could help avert a strike that would cripple GM, Delphi’s former parent and largest customer. The United Auto Workers had threatened to strike if the judge approved Delphi’s request to void its contracts.
UAW President Ron Gettelfinger and chief Delphi negotiator Richard Shoemaker praised Delphi’s action but said significant issues remain. The UAW represents the majority of Delphi’s 34,000 hourly workers.
“We have said consistently that the only basis of finding satisfactory resolution to these matters is through the use of the collective bargaining process with Delphi, GM and the UAW at the bargaining table,” Gettelfinger and Shoemaker said in a joint statement.
Delphi Chairman and CEO Robert “Steve” Miller said discussions to date have been helpful but “major obstacles” must still be resolved.
“As we have said before, we remain committed to reaching a consensual agreement,” Miller said in a statement. “This deadline should provide us sufficient time to deal with the complexities inherent in fashioning practical and workable solutions and an effective agreement that works for all of us.”
Friday marked the third time Delphi has delayed the filing while it talks with GM and its unions. Delphi says its U.S. hourly workers make approximately $65 an hour in wages and benefits, a level that isn’t competitive with other union and nonunion suppliers. Delphi has asked the UAW to cut workers’ pay and benefits by as much as 60 percent, a request the union has rejected.
GM, Delphi and the UAW are discussing several solutions, including GM-funded buyouts for Delphi workers or agreements that ensure Delphi workers can get jobs at GM. Last month, GM took a pretax charge of $3.6 billion associated with Delphi and said it expects to spend between $3.6 billion and $12 billion on benefits promised to Delphi workers.
“GM’s goal is to pursue outcomes that are in the best interests of GM and its stockholders and that enable Delphi to continue as an important supplier to GM,” the Detroit-based automaker said Friday.
GM, which buys nearly a quarter of its parts from Delphi, has a great deal at stake. A Delphi strike could cost GM as much as $8 billion in the first 60 days, Merrill Lynch analyst John Murphy told investors in a recent report.
Troy-based Delphi is one of the world’s largest auto suppliers, with nearly $29 billion in revenues in 2004. The company lost more than $1.1 billion in December as it continued to work through its reorganization. Delphi is required to file monthly financial reports with the U.S. Bankruptcy Court.