DETROIT -- Delphi Corp. CEO Steve Miller told a luncheon crowd in Detroit on Monday that the company's petition last week to terminate union contracts was an insurance policy to keep talks moving.
Miller said Delphi has not touched wages or benefits for about 33,000 hourly employees since the company put its U.S. operations in Chapter 11 bankruptcy protection on Oct. 8.
But Delphi cannot afford to continue losses in those operations indefinitely, he told a sold-out luncheon sponsored by the Detroit Economic Club. Delphi has lost more than $1 billion since entering Chapter 11.
"The filing keeps the process going," Miller said. "Think of it as an insurance policy. It's something you need to have but hope you never have to use."
Delphi filed the petition to terminate its labor agreements after twice asking the U.S. Bankruptcy Court in New York to extend a deadline requiring Delphi's six unions to accept wage and benefit concessions of about 60 percent. The unions, including the UAW, have balked at the concessions, saying they would destroy the workers' standard of living.
Miller said that the filing is far from an Armageddon scenario. It is a way to keep pressure on all the parties to keep moving toward a consensual agreement on lowering labor costs. The UAW has promised to strike Delphi if Miller insisted on seeking wage cuts from the current $27 an hour to about $16.50 an hour. The union said last week the filing was a provocative move that would hurt the spirit of negotiation. The hearing on the petition is scheduled for May 9.
A strike at Delphi would quickly shut down production at General Motors, Delphi's largest customer. Delphi supplies the automaker with about $14 billion worth of parts annually, by far the most of any supplier.
GM CEO Rick Wagoner said at a press conference Monday morning that he can't assure there won't be a wildcat strike.
"We've found it's easier to work with unions than against them," he said. "I can't give you complete assurance and say that there won't be a wildcat strike, but I think there's a great opportunity to reach a three-way agreement."
In addition to plans to cut wages, Delphi said last week that it would close all but eight of its 29 U.S. manufacturing plants.
Protesters marched in the rain outside the luncheon venue, carrying placards and chanting that cutting wages is a crime.
Todd Jordan, a production worker at Delphi's Kokomo, Ind., plant said Delphi plants have scheduled overtime to meet production schedules because workers have intentionally slowed production through methods known as "work to rule." Those include requiring the plant to adhere to all safety, line speed and other factory rules to crimp production.
Jordan, who sponsors a dissident UAW Web site, www.futureoftheunion.com, said work to rule is expected to be practiced more widely now that Delphi has said it plans to keep so few U.S. plants.
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