WARREN Delphi Automotive announces job cuts

A union official calls the cuts good news because he feared worse.
By DON SHILLING
VINDICATOR BUSINESS EDITOR
WARREN -- Delphi Automotive Systems is cutting 11,500 jobs worldwide, including more than 250 in the Mahoning Valley.
The world's largest automotive supplier announced a massive restructuring plan today that calls for cutting jobs and closing plants in the wake of a market slowdown.
Ann Cornell, a spokeswoman for Delphi Packard Electric Systems, said at least 250 jobs would be eliminated at local plants, where Packard makes components for wiring harnesses. She said Packard hopes the cuts can be achieved through early retirements without layoffs.
Packard also will cut its salaried staff through early retirement offers but declined to provide specifics.
The restructuring will include some production lines being removed from area plants.
Details were not provided.
Layoffs: Packard has 5,200 hourly and 1,800 salaried workers in the area. It recently placed 227 workers on permanent layoff and has been laying off hundreds of others for a week at a time.
Michigan-based Delphi announced it was going to sell or close nine plants worldwide, including several Packard plants, but no local plants are on the list.
Cornell said plans to build a plastic parts plant in Vienna Township are progressing but final approval from the corporation is pending.
Packard expects sales volumes to be lower in the future, especially compared to the record pace of vehicle construction last year.
"It's highly unlikely after we go through this economic slowdown that volumes will immediately jump up to those record-breaking volumes," she said.
Early retirements: Bob Sutton, shop chairman for International Union of Electrical Workers Local 717, called the loss of 250 local jobs good news because of the possibility of Packard's cutting much more. He said he expects enough early retirements this summer to prevent layoffs.
He said a survey nine months ago indicated that between 150 and 175 workers intended to take the retirement bonus of $15,000 on July 1.
A second window was negotiated Wednesday, however, that offers an incentive for workers to retire with 28 years' service, he said. They would receive a full pension as if they worked 30 years and a $15,000 bonus. Sutton said he expects a couple hundred workers to take that offer.
The union agreed to the incentive to get laid-off workers back on the job, he said. Under a labor contract, for every three workers who retire or otherwise leave, Packard must move one worker from a lower-paying wage tier to a higher-paying one.
Once there are no more workers in the lowest-paying wage tier, Packard must hire new workers. There are about 300 workers in this third tier. They earn 55 percent of normal pay. If they move up to the next tier, they receive annual raises for 10 years until they reach parity with the highest-paying tier.
Delphi said it will stop making less profitable products, which amounted to $900 million in annual sales.
Cutting costs: The 11,500 job cuts break down as 5,600 hourly workers and 2,000 salaried workers in this country and the rest in other countries. The cuts represent about 5 percent of Delphi's work force of 213,000 workers worldwide.
Delphi also is looking to cut costs by consolidating divisional and regional staffs and facilities; using the Web for buying, logistics and inventory management and eliminating warehouses and inventory storage.