CHICAGO -- Bankrupt auto parts maker Delphi Corp. on Monday said it would delay by one month plans to ask a judge to reject its labor contracts, easing fears of a potential strike that could cripple major customer General Motors.
Delphi also said it would accelerate discussions with GM over restructuring efforts after the automaker agreed to provide interim financial support to Delphi by temporarily giving up previously agreed-upon price reductions on auto parts for 2006.
"These constructive actions demonstrate a willingness to accelerate efforts to achieve consensual resolutions to the significant challenges facing Delphi," Delphi CEO Steve Miller said in a statement.
Delphi, which in October filed the biggest bankruptcy in U.S. automotive history, has said it must slash wages and benefits for its U.S. hourly workers by two-thirds or more to compete with other U.S. auto parts suppliers.
The proposals have run into heavy opposition from the United Auto Workers, the IUE-CWA and other unions representing workers at the Troy, Michigan-based company. Unions represent nearly all of Delphi's roughly 34,750 U.S. hourly workers.
GM, the world's largest automaker and Delphi's former parent, accounted for about 54 percent of Delphi $28.6 billion of revenue in 2004. A strike at Delphi could quickly cause production-disrupting components shortages for GM.
GM confirmed it has agreed to temporarily forego previously agreed-to 2006 price reductions on components supplied by Delphi, while Delphi is in talks with its unions.
Delphi said it would have no further comment regarding GM's role in the potential outcome or resolution of the issues.
The UAW, GM and Delphi failed to reach agreements on cost cuts before Delphi filed for bankruptcy in October. Delphi had sought wage and benefit concessions from the UAW, and financial help from GM to avert the Chapter 11 filing.
Delphi spokeswoman Claudia Piccinin declined to provide a dollar value for GM's actions.
On Monday, Delphi said it would defer filing motions with the bankruptcy court to reject labor contracts and modify retiree health care benefits until at least Jan. 20.
Delphi had previously planned to file those motions on Dec. 16 if agreements had not yet been reached and expected talks with its unions to continue even up to a hearing on Jan. 24.
The deferral of the filing date does not necessarily affect the timing of benefits to Delphi from reducing wage and benefit costs by agreement or through the courts, Piccinin said.