Delphi, the nation's biggest auto parts supplier, began its court push yesterday to throw out its labor contracts and impose sharply lower wages and benefit, a move that the United Automobile Workers union warns could lead to a costly strike that would shut down the company and its biggest customer, General Motors.þþBut the bankruptcy judge hearing Delphi's request indicated he would prefer that the two sides reach a settlement rather than have the court impose a decision. þþÿI would strongly urge the parties to sit down and ask each other in a nonlitigation setting many of the questions you are asking now, and see if you can make progress,ÿ Judge Robert D. Drain of the Federal Bankruptcy Court in Manhattan said. þþDelphi filed for Chapter 11 in October, in the biggest bankruptcy case yet in the automobile industry. The U.A.W. represents 24,000 of the 33,000 hourly workers at Delphi. U.A.W. members at Delphi plants are voting on whether to authorize leaders to call a walkout; the voting is to conclude on Sunday. Members of another Delphi union, the International Union of Electrical Workers, have already authorized a strike. þþAt yesterday's hearing, lawyers for the unions tried to cast the company's bankruptcy case as a sham.þþA lawyer for the U.A.W., Bruce H. Simon, called Delphi's restructuring ÿghoulishÿ and chided the company, saying it was misusing the bankruptcy process to gain leverage over its unions. þþSpeaking in sharp staccato tones, Mr. Simon said Delphi's plan was to ÿexit its U.S. operations and transfer its production to low-wage foreign facilities, and to convert the remaining few Delphi workers from the middle class to the margins somewhere between just getting by and the poverty level.ÿþþCompanies have the right under bankruptcy laws to ask that their union contracts be set aside, provided companies can prove that they are unable to right themselves without lowering wages and benefits. While judges have tended to rule in favor of companies in these instances, they have typically pushed both sides to settle before making a ruling.þþMr. Simon spent much of his opening statement trying to convince Judge Drain that Delphi was using the court hearing as a ÿfulcrumÿ to tip the negotiations in the company's favor and give it a stronger bargaining position.þþÿDelphi said: 'Give us authority. And if and when we decide to use it,' ÿ Mr. Simon said.þþJudge Drain appeared unconvinced. ÿIsn't it a complex forum for negotiations?ÿ he asked.þþJudge Drain often seemed skeptical of lawyers for the unions. At one point he asked Mr. Simon whether the U.A.W. would like the court to reject Delphi's motion, ÿso that the three of you can go off and do what you want to do,ÿ he said referring to the talks with G.M., the U.A.W. and Delphi. þþÿYou got it,ÿ Mr. Simon said, to which Judge Drain responded that the bankruptcy statutes did not give him that option.þþA lawyer for Delphi, Jack Butler, said the company's expensive labor contracts were hampering its competitiveness. ÿWe believe our unions concede there is a problem,ÿ Mr. Butler said. ÿBut without a consensual solution, Delphi must be empowered to change the status quo.ÿþþÿThere is no magic ball that makes competition go away. There is no magic ball that takes us back to a high-wage competitive environment,ÿ he said. ÿSimply stated, Delphi must be competitive to survive.ÿþþThe last offer Delphi formally presented to the U.A.W. in late March called for a drop in wages for factory workers to $22 an hour, down from about $28 an hour now. That rate would fall to $16.50 an hour in September 2007 but workers would receive a $50,000 stipend. But that deal was dependent on G.M.'s providing the $50,000 payments for each worker; G.M. owned Delphi until 1999. On Tuesday, lawyers for the unions said G.M. had not yet agreed to do that.þþLawyers for both the company and its unions said Delphi had not changed its position from the March offer. þþ
Source: NY Times
