With 30 years of work behind him -- and a pension of nearly $3,000 a month to look forward to -- Donald Wernicki retired from Delphi Corp. on Sept. 1.
That might sound like stepping off a cliff, with the auto parts maker in turmoil. Under the threat of bankruptcy, Delphi is seeking ways to slash costs for retiree health care. It also faces billions of dollars in unfunded future pension bills.
But Wernicki, a Clarence resident who worked as a tool-and-die maker at Delphi's plant in Lockport, said he doesn't think the retirement benefits are in serious jeopardy. The reason: ex-parent General Motors is still too involved in its former parts unit to ignore Delphi's plight.
"People don't realize how intertwined Delphi and GM still are," he says. "When you call the Delphi absence number, you get the GM absence line."
Wall Street seemed to lean toward Wernicki's way of thinking last week, as hopes rose that Delphi will avoid bankruptcy, lifting the company's stock 11 percent on Friday.
An analysis released by Merrill Lynch predicted that GM and the United Auto Workers have too much at stake to let Delphi fail. Chief Executive Robert S. Miller is holding talks with GM and the UAW aimed at cutting Delphi's costs, with an agreement deadline of Oct. 17.
On Friday, Miller told the Associated Press that workers should expect plant closings and the end of "jobs banks" that continue to pay surplus workers, because the company is "out of money."
However, Miller, who oversaw Bethlehem Steel's bankruptcy reorganization in 2001 and 2002, has said he wants to restructure Delphi without declaring bankruptcy.
Wilbur Ross, another figure from Bethlehem Steels restructuring, has emerged as a potential player in Delphi's financial overhaul as well. Ross, whose International Steel Group bought Bethlehem's remaining plants, has said in published reports that he's interested in buying Delphi and Ford supplier Visteon.
He envisions the struggling U.S. auto parts companies being combined to build a stronger company with global reach and a broader base of customers. The takeover investor said he has $4.5 billion in capital to underwrite the plans.
The unanswered question is how Delphi's plant in Niagara County and its 4,000 jobs would fare under such restructuring scenarios. Company officials have said the plant is losing money, contributing to Delphi's $747 million in losses so far this year.
"The auto industry has been slow to adapt to changing conditions," said University at Buffalo management professor Lawrence Southwick. "You're saddled with all these pension costs."
Promises to retirees have loaded $2.7 billion in pension obligations and $6.6 billion for other post-retirement benefits on Delphi's books, according to its filings at the U.S. Securities and Exchange Commission.
GM will be partly liable for those costs if Delphi is unable to pay, under the terms of its spinoff of Delphi in 1999, the filings state.
To Wernicki the spinoff deal looks like a financial shell game.
"GM tried to pull a fast one by separating us," he said. "They know (Delphi) would have to pay the same wages," but demanded lower prices on auto components.
According to Bloomberg News, a report by Merrill Lynch analyst John Casesa predicts that GM could be on the hook for $6.7 billion in Delphi obligations if the parts maker fails. The move would also sour GM's relationship with the autoworkers, from whom it will need cooperation to complete its own financial restructuring, he said.
In light of all that, Casesa on Friday raised his rating on Delphi stock to "buy" from "neutral."
Wernicki's departure from Delphi was sweetened with a $25,000 severance bonus under the Lockport plant's recent job reduction plan, which concluded in August. He expects to collect about $15,000 after taxes.
More such buyouts will likely figure in Delphi's and GM's efforts to cut costs in their U.S. operations. Lockport cut 200 jobs through the severance bonus, of 400 deemed surplus.
But for the 57-year-old, the extra cash wasn't enough to accelerate his plans to retire. The site will need to offer more than a few months' pay to encourage people to give up their Delphi package. "Obviously, nobody did it for the money," he said. "I see my grandkids every day -- that's what I want to do."
The workers who did depart with a severance check were ready to retire anyway.
"Every story is different -- some people have second marriages, second families; some just like to work," Wernicki said. "Everybody's not in the position I was -- I could walk away."