The transfer of hourly workers from Delphi Corp. to General Motors has lessened the threat of a strike at Delphi, which is seeking wage and benefit cuts.
Since December, 550 workers at Delphi's plant in Saginaw, Mich., have transferred to GM plants in Flint, Pontiac and suburban Detroit, said Glenn Johnson, a vice president of UAW Local 699 in Saginaw.
Several hundred more are expected to move to GM by the end of the year, Johnson said.
GM is expected to take 5,000 or more Delphi workers back into the fold. Delphi was created in 1999 when GM spun off its parts operations into an independent company.
The flowbacks, combined with about 13,000 Delphi retirements, are leaving little reason for the unions to strike Delphi, despite Delphi's demands for concessions.
Delphi has asked the U.S. Bankruptcy Court in New York to terminate its agreements with 33,000 unionized workers if the unions won't cut wages and benefits. A hearing is scheduled for Friday, Aug. 11, in New York. Delphi's two largest unions, the UAW and IUE-CWA, have threatened to strike if labor contracts are terminated.
But with the UAW, the vast majority of its 24,000 Delphi members who were working when Delphi entered Chapter 11 last October will have retired, taken a buyout or returned to GM by year end.
By December, most workers will be temporaries or new hires, earning $14 an hour. That's close to the $12.50 an hour that Delphi CEO Steve Miller said was necessary for Delphi to compete in the United States.
Ultimately, GM may have to subsidize wages and benefits for the few thousand Delphi workers who started before the Chapter 11 filing, said Sean McAlinden, chief economist for the Center for Automotive Research in Ann Arbor, Mich.
He said it would cost GM at most $550 million for the 12 months beginning in September to keep labor peace at Delphi for a year until the current contract between the UAW and Delphi expires in September 2007. A Delphi strike would shut GM within days.
GM spokeswoman Toni Simonetti said she couldn't comment on a possible wage subsidy. But GM reserved $5.5 billion in the fourth quarter of 2005 for a Delphi solution.
GM is making room for the Delphi workers through the success of its own early-retirement and buyout program. It yielded about 35,000 takers, 5,000 more than originally targeted.
By year end, Delphi's catalytic converter plant in Milwaukee probably will be staffed entirely by new hourly workers, said Skip Dziedzic, president of UAW Local 1866 in Milwaukee.
Of the 400 UAW-represented workers there before the Delphi Chapter 11 filing, about 300 will have taken retirements or buyouts by year end and another 100 will have flowed back to GM.
You may e-mail Dave Barkholz at [email protected]