Buyout plan set to begin

Bankruptcy court rulings could change benefit levels.
By DON SHILLING
VINDICATOR BUSINESS EDITOR
WARREN -- As a buyout plan at General Motors wraps up, a similar program to cut the work force at Delphi Packard Electric is about to begin.
Gary Reiser, president of International Union of Electrical Workers Local 717, said he isn't sure how many workers will take Delphi's buyouts, which range from $35,000 to $140,000.
About 1,700 of the union's 3,800 members have more than 30 years' seniority and can take a $35,000 buyout and their full pension.
At GM's Lordstown complex, about 1,500 of the 5,300 hourly workers have signed up for a similar buyout plant. The sign-up period ended Friday.
The Packard workers will have 45 days to sign up once the company introduces the program in the plant. The IUE and Delphi's parent company, Delphi Corp., agreed to the plan June 16.
Nothing set in stone
The Delphi plan has much uncertainty, however.
First, the auto supplier is operating under bankruptcy court protection and has asked a judge to cancel its union contracts and allow it to modify its retiree benefits. Hearings on that issue have been postponed to give Delphi and its unions time to negotiate a new wage and benefit package.
That means Packard workers don't know what benefits they would receive in retirement or what pay and benefits they will receive if they keep working.
"Some people think the bankruptcy will just go away, and some people are scared to death," Reiser said.
Also, the union doesn't know what will happen to Packard's operations in the Mahoning Valley, which produce cable, sensors, electrical centers and plastic and metal parts for vehicle wiring systems.
Company-wide cut
Delphi said in March that it will keep Packard's local plants as one of its eight manufacturing sites, while 21 others will be closed. Delphi wants to cut its hourly work force in North America from 34,000 to 12,000.
It hasn't provided specifics for the local operations but has said its surviving plants will have reduced staffing.
"My question is, 'What number do you want to be at when this is done?'" Reiser said.
Lindsey Williams, a Delphi spokesman, said that number isn't known because there are too many variables, such as future business levels and the number of workers who will take buyouts.
Packard workers also can't be sure there will be a job for them if they decline the buyout.
Right now, Local 717's labor contract guarantees workers a job. If they aren't needed, they are placed in a jobs bank, which provides them with full pay.
Such a guarantee would be eliminated if labor contracts are canceled. Also, Delphi has said that the jobs bank is one of contract provisions that is keeping it from being competitive.
Reiser said he expects upcoming contract negotiations to include how to reduce the work force if the buyouts don't produce enough cuts.
No negotiations have been set as Delphi is talking to other unions about buyout plans.
The court hearings on canceling the union contracts are set to resume Aug. 11.
In addition to the buyout for senior workers, younger workers can opt out with either $70,000 or $140,000, depending on years of service. Workers with between 26 and 30 years can leave work with a slightly reduced pension until they reach 30 years, when they would receive full pension and health-care benefits.
shilling@vindy.com