Delphi Withdraws Proposal to Cut Union Wages

Auto supplier Delphi Corp., which filed for bankruptcy protection two months ago, said Monday that it was withdrawing a wage proposal that angered its unions and that it would delay action to cancel its union contracts in an effort to reach a compromise on a restructuring plan.

The United Auto Workers, which represents the majority of Delphi’s 34,000 hourly workers, called the announcement “a step in the right direction.” UAW leaders had refused to negotiate with Delphi after the company asked the union to accept wage cuts of more than 60% as part of its restructuring.

“We have always believed that it is in everyone’s interest for these matters to be settled by the parties through the collective bargaining process,” the union said in a statement.

It was the second time Delphi had delayed a filing that would ask the bankruptcy judge to cancel its union contracts. Delphi originally planned to file that request last Friday, but delayed the action until Jan. 20 after restructuring talks with its former parent, General Motors Corp.

Delphi said Monday that it would delay the filing until at least Feb. 17, although the company warned it might put its previous wage offer back on the table depending on the outcome of negotiations between GM and its unions.

Delphi would risk a damaging strike if it asks a judge to void its union contracts. GM, its largest customer, could provide financial assistance or offer to hire back workers to ensure that a strike doesn’t happen. GM and Delphi haven’t revealed the details of their negotiations.

“Delphi is committed to completing its transformation plan as quickly as possible and to that end, does not intend to comment further on discussions with the unions or GM,” Delphi said.