Delphi plans major cuts within IUE

The company proposes decreasing local workers' pay to about $10 an hour.
By DON SHILLING
VINDICATOR BUSINESS EDITOR
Delphi Corp. wants massive cuts from the union that represents its Mahoning Valley workers.
The auto parts supplier aims to cut 65 percent of the union's members, trim pay by about 60 percent and slash benefits.
The International Union of Electrical Workers said Friday that the presidents of its local unions expressed "deep disappointment" in the company's offer and did not think it should be considered.
Delphi has said it will ask a bankruptcy court judge to void its union contracts if the IUE and United Auto Workers don't agree to new terms by Dec. 17. Delphi delivered its demands to the IUE for the first time Thursday but has been negotiating with the UAW for some time.
Delphi wants to cut its IUE work force from 8,500 to 3,000 through plant sales, closings, retirements and layoffs, the union said.
About 3,800 of the IUE members are employed in this area by Delphi Packard Electric Systems, which makes wiring systems for vehicles. Other IUE members work at Delphi plants in Dayton, New Jersey, California and southern states.
Proposals
Delphi plans to sell or close six of its 10 IUE facilities. Delphi considers its Mahoning Valley operations as one facility, even though Packard has several area plants.
Delphi also proposed lowering wages from about $25 an hour to $9 or $10 an hour for production workers, eliminating cost-of-living adjustments, dropping dental and vision coverage, reducing holiday and vacation allowances and having workers pick up a bigger portion of health-care costs.
The Regional Chamber said statistics show the average wage for production jobs in the Mahoning Valley is $16.52, while production workers in electrical equipment manufacturing averaged $14.23 an hour.
Delphi also would eliminate job security provisions, the jobs bank and any right to strike.
IUE Local 717, which represents Packard's area workers, has a job security provision that guarantees members a job. If not enough production work is available, workers go to work and are paid anyway. Recently, about 350 workers have been in that category, called the jobs bank.
Packard, however, has been drastically cutting back its work force as local employees retire. Packard has cut 2,000 hourly workers and 850 salaried workers in the past four years. The division has 1,250 salaried workers remaining in the area.
Union response
Gary Reiser, Local 717 president, said the IUE has asked local officials not to comment on the negotiations.
An IUE news release said union President Jim Clark made this comment to Delphi: "We will work with you to keep jobs for our members, but we will not have our dignity taken away from us."
Henry Reichard, another IUE negotiator, said the union will move forward cautiously and respond to the company's proposal after a thorough review. The end result must be "jobs worth having," he said.
Lindsey Williams, a Delphi spokesman, said the company plans to continue meetings to discuss its proposals. He said he couldn't comment on specifics.
The IUE said Delphi stated it doesn't plan to terminate the pension plan but reserved the right to take that action later.
UAW officials could not be reached for comment, but reports previously indicated Delphi was seeking large cuts in wages and benefits there as well. The UAW represents about 25,000 Delphi workers.
Packard outlook
Delphi's desire to cut 65 percent of its IUE work force seems to dash hopes that local Packard plants would escape largely unharmed by the company's bankruptcy.
Officials at the Regional Chamber have said they were optimistic about Packard because it has invested in new technology, trimmed its work force and taken other steps to improve efficiency.
Also, Packard is part of the only segment of Delphi that is making money. The electrical, electronics and safety product sector had operating income of $340 million in the first half of 2005.
Delphi's dynamics, propulsion, thermal and interior sector lost $340 million in the first half. The company's Automotive Holdings Group lost $527 million. This last group contains 11 plants that Delphi says must be fixed, closed or sold. None of Packard's plants is in that group.
Wilbur Ross, the billionaire who bought LTV Steel and other bankrupt steelmakers, is interested in buying some of Delphi's operations, according to news reports.
Ross formed a new company, International Steel Group, to acquire the steelmakers. His new company didn't take over the pension and health-care obligations for retirees and implemented new work rules in the mills. Eventually, he sold the new company to Mittal Steel Co.
shilling@vindy.com