Investment hinges on wage-benefit deal with unions

A deadline on Delphi's financing deal puts pressure on negotiators.
DETROIT (AP) -- When auto parts giant Delphi Corp. announced this week that an investment group would pony up as much as 3.4 billion to help the company out of bankruptcy, a clause in the deal raised the spirits of Delphi's unionized workers.
The investors won't release the money unless Delphi reaches a wage-and-benefit agreement with its unions, something it has been unable to do after a year of talks.
"It's a good sign," said Jim Hurren, president of United Auto Workers Local 467 at a brake, steering and transmission components plant near Saginaw that Delphi wants to close or sell. "They'll come up with something everybody can live with, or there won't be an agreement."
The investment group, led by Appaloosa Management LP and Cerberus Capital Management LP, set a Jan. 31 deadline for reaching the agreement.
The deadline, something that seldom is made public in such deals, works to the unions' advantage, said Bob Bruno, associate professor of industrial relations at the University of Illinois at Chicago.
Threats
Troy-based Delphi in the past had threatened huge wage cuts and plant shutdowns, and it has asked a federal bankruptcy court in New York for permission to void its labor contracts. In response, the UAW and other unions voted to strike if their contracts are scrapped.
But with a deadline looming a little more than a month from now, the company likely will have to bargain more earnestly, Bruno said.
"This perhaps levels the field a little bit," he said. "Now if Delphi isn't willing to make some compromises, their CEO, their stockholders are going to know that they walked away from a significant investment."
The unions, too, will feel some pressure to bargain because they have reason to help Delphi emerge from Chapter 11 bankruptcy protection, Bruno said.
Hurren said he hopes the UAW can bargain to save his plant near Saginaw and others that Delphi plans to jettison through sale or closure.
Officials at the UAW's international headquarters in Detroit would not comment for this story but have said before that they want to preserve as many Delphi jobs as possible in the negotiations.
With 14,200 workers, the UAW is Delphi's largest union. The International Union of Electrical Workers represents another 6,400 workers, including those in the Mahoning Valley.
Delphi, the former parts-making arm of General Motors Corp. that was spun off as a separate company, had 21,600 U.S. hourly workers at the end of September, the latest figures available.