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Delphi offers GM-backed buyout plan

The auto partsmaker hopes offering more workers a severance deal will help avert a strike.

With the help of the world's biggest automaker, the buyouts cover not only retirement-age workers but also unionized hourly employees represented by the United Auto Workers who have less time at Delphi.

The move will help Delphi of Troy, Mich., cull jobs and reduce labor costs, but with financial help from Detroit's GM.

"This makes everybody at Delphi eligible for something," said George Anthony, chairman of UAW local 292 at a Delphi factory in Kokomo, Ind. "A year from now, we'll have a whole new work force."

Reaching agreement on early retirements and buyouts brings the UAW and Delphi closer to settling a wider dispute and reduces the chance of a strike. The union objects to Delphi chief executive officer Steve Miller's plan to cut wages to as low as $12.50 an hour from $27, and close 21 of 29 manufacturing sites.

"Steve Miller and Delphi need to drastically reduce their work force, and the expansion of this buyout offer should help them toward that goal," said Erich Merkle, an IRN Inc. analyst in Grand Rapids, Mich. "For the most part, it's on GM's dime."

The New York bankruptcy court overseeing Delphi's turnaround has adjourned hearings on union labor contracts and health care benefits until Aug. 11 so that the three parties can keep negotiations going.

In May, the UAW's Delphi members gave the union leadership the go-ahead to authorize a strike if their contracts were broken.

A hearing on Delphi's contracts with former parent GM was also put off in favor of talks until at least Aug. 11, Delphi said.

According to Delphi, employees with less than 10 years' seniority can get $70,000 while those with more than 10 years can expect $140,000. Employees with 26 years at the company are now eligible for a buyout previously offered to those who had worked 27 years to 30 years. Those who accept the buyout will keep only their vested pension benefits.

[Last modified June 10, 2006, 05:55:50]