Delphi Corp. on Friday announced a deal with the United Auto Workers and General Motors Corp. to offer buyouts to all hourly employees and said the agreement represented significant progress in broader negotiations aimed at avoiding a strike.
The buyouts greatly expand early retirement incentives announced in March and mean that all UAW-represented employees will be offered something if they want to exit the company, which is under Chapter 11 bankruptcy protection.
The UAW represents about 22,000 of Delphi’s 31,000 workers, company spokeswoman Claudia Piccinin said. Delphi said it continues to negotiate with other unions to offer similar packages for their members.
As with the previously announced retirement incentives, GM is helping to pay for the buyouts. Delphi is a former division of GM and remains its largest supplier.
The first agreement offered retirement incentives for workers with at least 27 years of service and an opportunity to return to GM for 5,000 workers.
The new agreement, which was signed Monday, is subject to the approval of a bankruptcy judge in New York. It would offer buyouts of $140,000 to workers with at least 10 years of service; those with less than 10 years would receive $70,000 to sever ties with the company and give up all benefits except for vested, accrued pension benefits.
The deal would also expand a preretirement option to include workers with 26 years of service.
GM and Delphi are each paying half the cost of the buyouts.
The buyouts could help Delphi avoid a strike, which would be crippling both to the supplier and to GM. Troy-based Delphi has asked a federal bankruptcy judge in New York for permission to void its union contracts so it can reduce wages. UAW members have overwhelmingly authorized the union to call a strike if the court grants permission and the company takes such a step.
Both the company and UAW officials have said they prefer a negotiated settlement to any action by the court. Buyouts are seen as a way to provide a “soft landing” for more Delphi workers.
In light of the agreement, Delphi this week asked Bankruptcy Judge Robert Drain in New York to postpone a hearing on its motion to allow the parties to focus on negotiations. Drain agreed and on Friday set a new date of Aug. 11 — a move welcomed by Delphi, GM and the UAW.
GM had requested an adjournment late last month, and GM spokeswoman Toni Simonetti praised the decision, saying it would allow the parties to “devote time and attention to negotiating rather than preparing for court hearings.”
She said the buyout offers are “important steps toward reaching a consensual agreement.”
In a memo to union locals posted on the UAW Web site, union President Ron Gettelfinger and Vice President Richard Shoemaker praised Delphi’s request to postpone the hearing as “a step in the right direction.”
“This is just another improvement,” said Clyde Sims, bargaining chairman for UAW Local 913, which represents workers at a Delphi plant near Sandusky, Ohio. “It’s going to allow the negotiating process to take place.”
No timeframe has been set for the new offers because the judge’s approval is still pending. Workers considering the previously announced offers have until June 23 to decide.