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A tough choice at Delphi: Should I stay or should I go? Buyout offer comes as firm seeks wage cuts

While Delphi's hourly workers produced auto parts at the Lockport plant last week, they also had a big decision on their minds: Should they accept buyout offers presented to eligible employees, or forge ahead with their careers at Delphi, amid uncertainty about the company's future?

Delphi's Thermal and Interior division plant in Lockport has about 3,800 employees, about 3,000 of whom are represented by the United Auto Workers. The buyouts could dramatically change the makeup of the work force, depending on the workers' decisions.

General Motors Corp., Delphi and the United Auto Workers announced the sweeping buyout plan last Wednesday. About 13,000 Delphi workers are eligible for the offers, and about 5,000 other workers would be eligible to transfer back to employment with GM.

John Lunghino, a financial adviser who works with Delphi employees, was hearing from lots of them on Friday. "The call waiting didn't stop ringing," he said.

But Lunghino said he is pleased they are asking questions and not rushing into a decision. A $35,000 lump sum offer can mean very different things for two different workers, depending on their respective situations with their families and homes, he said.

"Each and every one is saying, 'Can we sit down and see how this affects my circumstances?' " Lunghino said.

He noted that the Lockport plant hired a wave of workers in the mid-1970s, and many of them have the amount of seniority targeted by the buyout offers.

"There was a whole group that was waiting for some kind of offer," he said.

But he is urging workers to keep the $35,000 payment in perspective, especially considering that taxes would be subtracted from it. "It's just the incentive, exactly that," he said.

The same questions are on the minds of Delphi workers across the company.

Tim Krzeszewski, a 52-year-old skilled tradesman at Delphi's steering plant in Saginaw, Mich., has spent 34 years with GM and Delphi.

"To me, it's like a gambling issue. Are you going to keep the hands that were dealt to you . . . or throw the cards in and ask for a re-deal and hope you get a better hand," Krzeszewski said. "Then you could lose it all."

Except for a year after high school when he held jobs as a cook and as the operator of a backhoe loader, Krzeszewski has spent his entire working life at GM or Delphi. He experimented briefly with the idea of becoming a teacher, going back to school during a 2 1/2 -year layoff in the late 1980s. But when GM called with an opening, he returned to the fold.

In a perfect world, Krzeszewski planned to continue working a few more years and retire between 55 and 60. That would see his second son through college, allow him to salt away more savings from yearly wages averaging close to $90,000 including substantial overtime pay, and earn additional future pension benefits, Krzeszewski says.

"I figured 55 was a good time to get out and still have some good years ahead of me," he says.

He is leaning heavily toward taking early retirement.

"I really don't have much of a choice," he says. "Should I just sit back and say I'm going to take the lower wages and possibly lose my pension? No. I'm going to retire."

>Plenty of questions

Inside the Lockport plant, countless workers last week were stopping to ask questions of Paul Siejak, president of UAW Local 686 Unit 1, which represents them. On Friday, he was having lunch in the union hall's social club, the first time he had been able to get to the union hall since last Tuesday. But Siejak said he understands the workers' interest and concern.

"There are a lot of questions that pertain to this," he said. "Hopefully we can bring back some answers to their questions." UAW leaders are meeting in Detroit on Tuesday.

Siejak noted that Delphi's portion of the buyout offer still needs the assent of a bankruptcy court judge next month. "This is just a piece of paper until it's approved by the bankruptcy court April 7," he said.

Another significant piece of the talks, wages and benefits for Delphi workers, has yet to be resolved, Siejak said.

"You've got some information, but you don't have all of it," he said.

As the talks have continued, many Delphi workers say they have been saving money, cutting expenses, or working additional overtime at the plant to prepare themselves financially for a strike. Some workers note that even if there is no strike, workers might have to prepare to live on lower wages, as the company has called for.

Industry observers say they believe the threat of a strike at Delphi was reduced by last Wednesday's buyout packages offer announced by Delphi and General Motors. But Delphi and the UAW are continuing their talks, which are aimed at cutting costs at Delphi.

The auto parts supplier has called for sharp cuts in wages and benefits, and wants a labor agreement by Thursday. Without that, the company says it will ask a bankruptcy judge on Friday to void its labor contracts.

The UAW has warned that throwing out its contract could trigger a strike. But it could be several weeks before a judge would rule on the company's request, allowing additional time for the two sides to reach an agreement.

>Workers are preparing

"I'm saving," said Dan Quinones, a Lockport resident and Delphi worker. "I'm trying to work a little overtime to reduce bills."

Ordinarily, he would put his family's income tax return toward home improvement. This year, the money is going into savings, he said. He even passed on getting digital video recorder service, since it's an extra few dollars a month.

Workers have had plenty of time to prepare, Quinones said. "We've been on alert for a strike since October," when the company filed for Chapter 11 bankruptcy protection.

Gregg Shotwell, a Delphi worker in Michigan and organizer of a group of dissident UAW members called Soldiers of Solidarity, for months has urged his co-workers to prepare for a strike.

"People are trying to pay off bills and credit cards and they are delaying major purchases," Shotwell said in an email. "We have all become more aware of our spending."

A Delphi worker who asked not to be identified said his fellow employees appear to be cutting back on big-ticket purchases, or delaying taking vacations.

When Delphi UAW workers signed their most recent contract, in 2003, they believed they had a deal that would last until fall 2007, the worker said. Workers made decisions about expenses such as tuition and auto loans on that timetable, he said, but they now face the possibility of their financial picture changing much sooner.

While the workers inside the Lockport plant performed their jobs and mulled the buyout offers last Friday, Richard Cooper was maintaining his one-man salute to the workers along Upper Mountain Road.

The retired autoworker, who used to work at what is now an American Axle plant in Buffalo, held a sign reading "I Believe in Miracles, UAW and GM," and waved to workers during the afternoon shift change. Motorists, many of them driving Chevys, honked their horns and waved back.

"They know it's only one person, but it's meaningful, because it represents something," said Cooper, an Alden resident. "I try to soften up the executives' hearts and let them know we're all Americans, not two countries fighting each other."

>The ripple effect

The impact of all of the big decisions at Delphi, such as what happens to their wages, will have a ripple effect felt beyond the plant and its employees.

Kim Hill of the Center for Automotive Research in Michigan researches the impact that automotive plants have on their communities' economies, and part of that impact comes from how workers use their paychecks.

"They go out in the community and they spend," Hill said. "If there's a lot of money moving around, it tends to create jobs."

Aside from a strike threat, there are other concerns about what lies ahead for Delphi, with the possibility of pay reductions, job cuts, plant closings, or some combination of those moves across the company.

Even if the Delphi workers' pay is reduced, Hill said, workers still need to buy groceries or clothes, so not all of their local spending would stop. But more-expensive purchases, such as a new car, might be delayed, he said.

"They might just get it fixed, or get a used one," Hill said.

If the workers' pay is reduced, as Delphi executives have called for, Hill said employees will typically cut other expenses before giving up their homes. For that reason, he doesn't believe a wage cut would have a dramatic impact on the area's real estate market.

"A house is like the last thing people want to shed," Hill said.

The Associated Press contributed to this report.


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