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Delphi labor contracts threatened Embattled company asks a federal bankruptcy judge to void agreements

Delphi Corp. asked a bankruptcy court judge today to throw out its labor contracts, and hourly workers at the Lockport plant are worried and unsure about what any new wage structure would look like.

"I've been hearing a lot, but I haven't seen anything," said Dan Quinones, a five-year employee of the plant, referring to wage-cut proposals publicized this week.

Delphi, the largest U.S. auto supplier, said today that it had not reached an agreement to lower wages for its 34,000 U.S. hourly workers, and it was filing motions today to void its contracts.

People for this story were interviewed Thursday, before it became known that the plant in Lockport is one of just four that Delphi plans to keep operating.

Delphi spokesman Lindsey Williams has said Delphi was still in talks with GM and its unions as of Thursday afternoon and hadn't set a deadline for those talks to end. On three other occasions, Delphi had delayed filing motions to cancel its contracts to continue negotiating with GM and its unions.

Some of the 3,800 workers at the Delphi Thermal and Interior plant in Lockport said they are frustrated with the lack of information as the talks continue between Delphi, the UAW and General Motors.

Terry Dennis, a 29-year employee, said it has been difficult to evaluate the buyout offer announced last week for many GM and Delphi workers.

"Right now, there's just not enough details for anyone to make a good decision," Dennis said.

Delphi filed for bankruptcy last October. Since then, many workers say they have been saving money, cutting expenses or working more overtime to shore up their finances for whatever comes next. Longtime workers wonder what will become of their pensions. Newer employees wonder about the plant's long-term prospects.

"What people really want is job security," Quinones said. "Job security is not on the table. It's not in there."

Dennis also worries about the number of concessions he has heard Delphi wants from workers. And he wonders how secure his pension would be, depending on whether he chooses to accept one of the buyout offers proposed last week.

Delphi insists wage cuts are a necessary part of its restructuring. The company says it was saddled with uncompetitive labor agreements when it spun off from GM in 1999. Delphi says it is now paying workers $75 an hour in wages and benefits.

But the UAW, which represents most of Delphi's hourly workers, reacted angrily this week to Delphi's latest proposal, which calls for lowering workers' wages from $27 an hour to $16.50 an hour in 2007. In exchange for the cuts, workers would each receive a one-time $50,000 payment, an offer that hinges on financial support from GM. Local union leaders said the UAW won't take the deal to its members for a required vote.

Brian Hartman, a five-year employee of the plant, said he recognizes the outcome is beyond his control, but he still thinks about it a lot.

"Of course it's on my mind. I've got three kids and a wife," Hartman said.

Hartman also has strong family ties to the plant, and a strong union background. Both his parents retired from the Lockport plant, and his two sisters and an aunt still work there.

While Delphi is going through tough times, Hartman said he is determined to continue working there and "ride it out."

Delphi's attempt to void its labor contracts also raises the specter of a strike by the UAW. The union has threatened a walkout if its contract is thrown out.

Dennis said he doesn't believe a bankruptcy court judge would agree to throw out Delphi's labor contracts, since that could trigger a strike that could also devastate GM.

"That's not going to be good for anybody," Dennis said. "I don't believe anybody wants that."

Delphi's request for a bankruptcy court judge to void its contracts marks the start of a process, observers say.

A judge can now schedule a hearing on Delphi's motions in early May. In the interim, Delphi, GM and the UAW could keep trying to reach a settlement.

In many other cases, a settlement is reached before the matter ends up in the judge's hands, because there is so much at stake for either party if it loses in court, said Garry M. Graber, an attorney with Hodgson Russ.

"It's very rare it gets to that point, where a judge gets to decide," Graber said.

Jim McTevia, a managing member of turnaround firm McTevia and Associates in Michigan, also predicted that Delphi and the UAW will come to an agreement. McTevia said he doesn't believe the judge would be eager to void the contracts, with the prospect of a strike hanging over the outcome.

This report contains information from the Associated Press.


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