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Delphi vote set on buy-down Deal's approval could end threat of strike

Some 2,200 workers at Delphi Corp.'s factory in Lockport will be among the union members voting next week on a proposal to slash seniority workers' wages by a third in return for bonuses called "buy-downs."

If approved, the deal could clear the way for Delphi's emergence from bankruptcy and end the threat of a strike that would quickly shut down its customer, General Motors.

"This has been a long and frustrating road for our membership," said Paul Siejak, president of United Auto Workers Local 686 Unit 1 at Lockport.

Autoworkers will hold a vote tentatively scheduled for Wednesday, Siejak said, after reviewing the proposals starting Monday. Voting is to be complete throughout Delphi UAW plants by the end of Thursday, he said.

How to cut union wages has been a bone of contention since the auto parts maker filed for bankruptcy in 2005.

"I think the workers will almost certainly ratify this," Hilbert College business professor Patrick Heraty said. "It's been a long time coming . . . [and] it reflects the realities of the marketplace."

But for Delphi's sprawling complex in Lockport, the question could be divisive. Of the 2,200 autoworkers here, more than half receive relatively high "legacy" wages, according to union officials.

Comments on newspaper Web sites in Michigan are already taking aim at the proposal.

"Buy-downs? Sounds more like sell-outs to me," wrote one anonymous critic. Another defended the proposal, saying, "All Delphi wants to do is pay [workers] market rates."

UAW Local 686 in Lockport is the largest UAW local in Delphi, officials have said. Delphi and the UAW wouldn't disclose the details of the agreement, and local union officials remained mum.

The agreement is also subject to approval of U.S. Bankruptcy Court, which is overseeing Delphi's reorganization.

The auto parts maker has been struggling since 2005 to cut "legacy" union wages of $27 an hour. Newer workers, hired since a two-tier wage contract took effect in 2004, make $14 to $18.50.

The dwindling number of older UAW hands who make the higher wage would be able to take an undisclosed lump sum, reportedly about $30,000 to $50,000, in return for accepting a wage cut to the lower-tier level, according to published reports in Michigan newspapers.

Some also could opt to retire or transfer to ex-parent General Motors, the reports said.

"If ratified, we believe this agreement will be a significant milestone in our transformation and a step toward emergence," John Sheehan, Delphi's chief restructuring officer, said in a statement.

Delphi has 17,000 UAW workers, 4,000 of whom earn the higher rate, spokesman Lindsey Williams said. According to UAW officials, the Lockport work force has about 1,250 higher-wage workers.

The Lockport plant cut its high-wage union ranks by 1,333 through buyouts in 2006, then hired about 900 workers at the lower-tier wage.

While most of those voting will be lower-tier workers, Heraty said he expects high earners to support the deal as well.

"They are going to get something for this -- they are going to get a cash payout," he said. "They are going to realize this is the best deal they're going to get."

Delphi initially threatened to cut union wages to $12 an hour after filing Chapter 11 bankruptcy in October 2005. That prompted a UAW counterthreat of a strike and brought General Motors, Delphi's former parent and biggest customer, into the talks.

GM and the UAW are scheduled to begin talks on their labor agreement July 23, putting pressure on negotiators to wrap up the Delphi deal. The tentative agreement means voting at Delphi will be complete before the company's summer shutdown period begins July 2.

e-mail: fwilliams@buffnews.com

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