DETROIT -- The United Auto Workers union is asking a bankruptcy court judge to reject Delphi Corp.'s plan to reward executives with cash bonuses and stock options if the auto supplier emerges from bankruptcy.þþÿAt a time when Delphi is proposing deep cuts in wages and benefits and contemplating a severe contraction of its domestic operations that could leave tens of thousands of employees--both hourly and salaried--without jobs, deep resentment and anger over a program valued at over $500 million can neither be understated nor should it be ignored,ÿ the UAW said in a filing with the U.S. Bankruptcy Court for the Southern District of New York. The UAW posted the filing on its Web site late Tuesday.þþJudge Robert Drain was expected to consider the issue at a hearing Nov. 29, but Delphi asked that to be delayed so it could have more time to consider the objections that have been filed, spokeswoman Claudia Piccinin said Wednesday. The new hearing is set for Jan. 5.þþOn the day before Delphi filed for bankruptcy in October, the company said it would boost the severance packages for 21 top executives. Under the new agreement, executives will be eligible for 18 months of pay if Delphi lays them off. Previously, severance packages were capped at 12 months. In exchange, executives signed agreements promising not to work for competitors for the 18-month period.þþDelphi also wants the court to approve a separate package that would grant 10 percent of the equity of the reorganized company to 600 executives if Delphi emerges from bankruptcy. That package also would pay out bonuses to executives both during and after bankruptcy.þþThe UAW calculates the value of the stock options is $400 million. The union also says the bonuses would cost $42 million annually during bankruptcy and $89 million once the company emerges from bankruptcy.þþÿUAW opposes the ... motion because it is grossly excessive and an imprudent use of estate assets,ÿ the union said in the filing.þþInvestors in a lawsuit against Delphi also are objecting to the company's compensation plan. The lawsuit alleges Delphi's former managers fraudulently inflated the company's financial results.þþDelphi Chairman and Chief Executive Robert S. ÿSteveÿ Miller has defended the plans, saying Delphi executives haven't gotten bonuses in three of the last four years and their stock and stock options have lost value.þþMiller said the industry average for a severance package is 24 months, and Delphi wants to keep its executives because looking for new ones would be disruptive. He pointed out that only executives who are fired would be eligible for the severance money.þþMiller excluded himself from any severance or bonus plans and is reducing his $1.5 million base salary to $1 per year on Jan. 1.þ
Source: Chicago Tribune
