DETROIT -- Delphi Corp. received approval last week in U.S. Bankruptcy Court for another round of executive bonuses, despite a barrage of criticism from its unions.
Bankruptcy Judge Robert Drain gave permission to Delphi to pay executive bonuses totaling as much as $37.9 million for meeting performance goals in the second half of the year. The court approved a $36 million bonus plan in the first half on the premise that the bonuses are necessary to keep management talent during the bankruptcy.
Delphi spokeswoman Claudia Piccinin said the decision will help Delphi keep its executive compensation on the same level as its large competitors. Delphi, of Troy, Mich., put its U.S. operations in Chapter 11 bankruptcy protection Oct. 8.
Delphi's six unions opposed the next round of bonuses. One of them, the UAW, represents about 24,000 of Delphi's 33,000 unionized U.S. workers.
Before the Bankruptcy Court decision, the UAW said the bonuses are jarring to negotiations and offensive to workers being asked by Delphi to take wage and benefit cuts of 60 percent.
In an opposition brief filed by the UAW before the hearing last week, the union said it did not agree to an attrition program that will retire or buy out more than 13,000 UAW-represented Delphi workers so that executives could benefit.
In October, the court will begin hearings on executive bonuses and stock payouts pegged to Delphi's emergence from Chapter 11. The value of those incentives could run into hundreds of millions of dollars.
UAW President Ron Gettelfinger chastised Delphi last week even before the compensation hearing. After a public appearance in Washington, Gettelfinger said the supplier was doing a "slow walk" toward an Aug. 11 bankruptcy hearing at which Delphi's petition to terminate its labor agreements will be aired.
Gettelfinger said the company has refused to budge from demands for drastic wage and benefit reductions, despite the union's cooperation in the attrition programs funded largely by General Motors.
Delphi ranks No. 4 on the Automotive News list of the top 100 global suppliers with estimated worldwide original-equipment automotive parts sales of $22.59 billion in 2005.
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