IUE lawyer: We aren't the UAW

Union and company lawyers argued about Delphi's labor contracts.
By DON SHILLING
VINDICATOR BUSINESS EDITOR
NEW YORK -- The union that represents Delphi Corp. workers in the Mahoning Valley is tired of feeling ignored.
A lawyer for the International Union of Electrical Workers argued in court Tuesday that Delphi should give it a unique contract offer -- not one based on an offer to the United Auto Workers.
For that and other reasons, Delphi's contract with the IUE should not be rejected, Atty. Tom Kennedy said in U.S. Bankruptcy Court here.
Judge Robert Drain is holding hearings on Delphi's request that its union contracts be voided so it can survive. Opening arguments were held, and the first of 34 witnesses took the stand. Hearings will continue today, Friday and later dates to be determined.
Delphi had asked for the authority to cancel the contracts at some later date, with 10 days' notice. The judge, however, said he is treating the motion as a request that he cancel the contracts upon issuing of an order.
Union lawyers argued bankruptcy law doesn't allow Delphi to put the canceling of its contracts in its "hip pocket" while continuing negotiations.
Delphi has not met legal requirements for voiding the IUE contract because it hasn't held meaningful negotiations, Kennedy said. The IUE will not accept pattern bargaining, where one union accepts similar terms negotiated by another union.
Wage matters
More talks have been held with the UAW, but the IUE has shown that it negotiates differently from the UAW, Kennedy said.
Delphi has said that its production workers make $27 an hour, but that is not true at several IUE plants, he said. In fact, wages are set by local unions with the IUE, not nationally, he said.
The IUE has been willing to accept lower wage rates in certain cases when Delphi can prove a need, he said.
Top pay at a plant in Alabama is $12 an hour and $24 at a plant in Kettering. The top pay for workers at Delphi plants in the Mahoning Valley is about $27.
The local plants are among Delphi's profitable plants.
Kennedy and attorneys for the other unions also took issue with a Delphi statement that it has bargained in good faith but the unions haven't responded.
The IUE didn't make a counter offer to Delphi's November contract proposal because that proposal was later withdrawn, he said. Delphi's offer in March couldn't be responded to because it wasn't firm enough, he said. The offer's pay rates were based on having General Motors Corp., Delphi's parent company, subsidize the wages, which it hasn't agreed to do.
Delphi offered to pay production workers $12.50 an hour in November. In March, it made an offer of $22 an hour with the GM subsidy, but the pay would fall gradually to $16.
The IUE tried to negotiate on the one area where Delphi has made a concrete offer -- an incentive plan for workers to retire or leave the company, Kennedy said. Delphi refused to negotiate, he said.
UAW deal
The IUE wanted a different deal than the UAW approved, which calls for payments of $35,000 for workers with 30 years' experience and amounts up to $140,000 for younger workers who would leave with no retirement benefits.
The IUE wanted higher payments because it doesn't have provisions that allow workers to return to GM with $25,000 relocation payments, Kennedy said. The UAW deal will allow up to 5,000 workers to return to GM.
Kennedy and lawyers for other unions argued that Delphi short-circuited negotiations by filing its court action. Attention recently has been focused on getting ready for the court hearings.
The judge said, however, that he strongly urges the unions and company to negotiate during the break in these current and later hearings. He advised the unions that they are proceeding at their own peril by not responding to the company's contract offer.
The judge said he will determine whether the company has made a valid offer.
The union lawyers said Delphi filed the motion to reject the contracts now in order to put pressure on GM to make contributions to the Delphi wages. GM will be threatened because of the possibility of a strike by Delphi unions if the contracts are rejected, lawyers said. GM assembly plants rely on Delphi for parts to make vehicles.
Kennedy said Delphi's offer of $12.50 an hour won't go over with union members and is "south of the strike line." Apparently, Delphi doesn't want to go over $20 an hour, which would be required to reach an agreement, he said.
Delphi's lawyer
Jack Butler, a Delphi lawyer, told the judge that Delphi's witnesses will show that the company has negotiated in good faith and met other legal requirements for its motion to be approved.
He said that later in the hearings the unions are going to put local union officials on the stand to talk about the impact of Delphi's proposed cuts in pay and benefits.
Butler said, however, that unless the employee costs are cut, all of Delphi's North American operations will face sale or liquidation.
"One way or another, there is going to be fundamental change," he said.
People in the "industrial heartland" will not receive all that has been promised them, but Delphi has no choice but to act, he said. It cannot continue as an automotive supplier that is paying rates of auto manufacturers, he said.
Delphi can't afford to wait until the union contracts expire in September 2007.
"This structure can't survive through the next winter," he said.
In other matters, Judge Drain said shareholders, bondholders and creditors can participate in the hearing, but only on the question of Delphi's business judgment on whether canceling the union contracts is necessary.
The UAW had wanted those groups banned from participating in the hearings.
Lawyers for groups of shareholders and bondholders said that they oppose the voiding of the contracts.
shilling@vindy.com