New Delphi Proposal on the Table
Delphi has formally proposed a new wage schedule for its UAW-represented employees. The proposal would immediately cut wages from $27.00 per hour to $22.00 hour, and the wages would gradually go down to $16.00. The $22.00 figure includes a subsidy from General Motors. This subsidy would be phased out over time to get to the lower figure.
Is it enough to avoide a strike? In my view: probably. Delphi CEO Steve "the Pompatus of Bankruptcy" Miller did a good job at setting low expectation at the outset of the bankruptcy by threatening to impose $9.00/hr. wages. This proposal is far more reasonable than that. Secondly, the workers would not make anything close to $22.00 in strike pay. Finally, a lot of the higher wage workers will be gone anyway through the GM buy-out plan.
Will it be good enough to keep Delphi in business? That's a harder question to answer. If they can convince the Chapter 11 trustee and the creditors committee, they at least have a shot at it.
Automotive News
Tuesday, March 28, 2006
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