Auto CEOs drool over Delphis takeaways

DETROIT — The United Auto Workers union battled to get a new contract with Delphi and is now beginning tough negotiations with the Big Three automakers, Ford, GM and Chrysler.

The Delphi contract includes the closure of 10 UAW plants, with the company keeping four in operation. Seven additional plants will be sold.

Delphi had previously enacted wage cuts of approximately $10 an hour for most of its employees. The new agreement will extend the wage cuts to about 4,000 workers who were at Delphi when it was spun off by General Motors. Their pay will drop from $27 per hour to between $14 and $18.50. These former GM workers will be offered $105,000 over three years in exchange for taking the lower wages or buyouts of between $70,000 and $140,000.

The contract was approved by 68 percent of the workers, despite the painful takebacks. The settlement points to the problems of workers fighting multinational corporations in an era of globalization.

When Delphi filed for Chapter 11 bankruptcy protection, its chairman, Steve Miller, only accounted for the company’s U.S. operations. He purposely excluded Delphi’s foreign factories, which employ 115,000 workers and operate in low-wage countries such as Mexico and China. These are moneymaking operations, but U.S. bankruptcy laws allow the super-profits made at the expense of low-wage workers in countries throughout the world to be excluded.

Delphi sought court approval to dissolve the union contract, throw out the pension plan and cut wages and benefits by up to 75 percent. While demanding big concessions from the union, Delphi asked the bankruptcy court to allow it to reward its top managers with hundreds of millions of dollars in salary and stock options. “Hogs slopping at the trough of corporate greed” was how UAW President Ron Gettelfinger referred to the Delphi brass.

Since the Delphi concessions were forced on the union in June, GM stock has risen 23 percent. It is hard to read anything into this other than that investors are looking for similar concessions from the UAW in September. Ford’s stock, too, has risen, though not as dramatically since the Delphi deal.

Still to be fought out are the local agreements. One bone of contention will be GM’s and Delphi’s language in the national contract stating they want more flexibility to have skilled workers do production work and allow more outsourcing of union jobs.

GM’s “willingness” to grease the skids and help forge the deal by offering buyouts and buy-downs works in their favor. A strike would have been crippling for GM (GM is Delphi’s biggest customer) and GM has been subsidizing Delphi by paying higher prices for parts. With more Delphi plants closed, they will be freer to look for cheaper foreign parts. The Big Three have been telling their suppliers to leave the country to remain competitive.

Anti-labor forces would like to use the agreement with Delphi to bludgeon the rest of the labor movement. For example, comments have been posted on the web calling on Michigan teachers to also “face reality” and accept contract concessions.

At the same time, a recent analysis in the Detroit Free Press showed that 80 top executives at Ford, GM and a dozen auto suppliers had an average income of $4.2 million in 2006, a 22 percent increase over 2005.

As the UAW begins negotiations with GM, Ford and Chrysler, all who are not multimillionaires have a stake in the autoworkers’ struggle.

jrummel @pww.org