zeroday

http://money.cnn.com/2006/03/31/news...ex.htm?cnn=yes

By Chris Isidore, CNNMoney.com senior writer
March 31, 2006: 10:09 AM EST

NEW YORK (CNNMoney.com) - Delphi filed Friday to void its contracts with union workers and General Motors and announced plans to close or sell 21 of its 29 plants -- moves that could spark a strike at the auto parts maker and a possible bankruptcy filing at its biggest customer, GM.
Delphi (Research) filed motions with the federal judge overseeing its bankruptcy proceedings to shed contracts it says it can no longer afford. But it said it was encouraged by progress in talks with the unions, adding it's hopeful an agreement can be reached on concessions before a court hearing scheduled for early May.
"While our court filings are necessary procedural steps to enable action that may become necessary at some point in the future, we are singularly focused on reaching a consensual resolution with all of our unions and GM before any court hearing is necessary," said a statement from Delphi CEO Steve Miller.
But the United Auto Workers, the company's largest union, attacked the court filing, saying it killed momentum towards any kind of consensual agreement between labor and management.
"Today it appears there is no basis for continuing discussions," said a statement from UAW President Ron Gettelfinger and union VP Richard Shoemaker, its top negotiator with Delphi.
"In the event the court rejects the UAW-Delphi contract and Delphi imposes the terms of its last proposal, it appears that it will be impossible to avoid a long strike. The UAW has worked diligently in good faith to resolve the Delphi situation through collective bargaining instead of through a lawyer-driven court process or confrontation. Regrettably, Delphi has chosen another path."
GM said it was disappointed with the moves by Delphi but that it looked forward to trying to reach an a three-way agreement with the unions and Delphi.
The other major union at the parts maker, the IUE-CWA, has also threatened to strike if the labor contracts are voided, although any decision by the court on whether or not to let the auto parts maker out of the contracts is likely months away.
Before Delphi's statement Friday, most experts expected Delphi and the unions to reach a deal without any kind of prolonged strike.
But if those experts and the company's expression of optimism are wrong and there are prolonged strikes at Delphi plants, it would mean a halt of production at GM (Research), which could even take the world's No. 1 automaker into bankruptcy court itself. While GM spun off Delphi in 1999, the parts maker is still its largest supplier and it can't continue to produce cars for any prolonged period without it.
The threat of a strike, along with contract obligations that GM has to its former employees at Delphi, is among reasons that GM, Delphi and the UAW were involved in joint talks on an agreement announced earlier this month for GM to offer retirement-eligible UAW members at Delphi $35,000 if they agreed to retire. It also is offering its own employees even bigger incentives to retire or leave GM in order to clear space to rehire 5,000 current UAW members at Delphi.
As for its GM contracts, Delphi's statement said it needs to stop losing money on some of its parts contracts with its former parent, and that its motion covers contracts with about half of the North American annual purchase volume revenue from GM.
"We simply cannot continue to sell products at a loss," said Miller in a statement.
But GM, which has already said that the bankruptcy at Delphi will cost it at least $5.5 billion before tax, could be on the hook for even more money if it has to contribute more to a settlement between the UAW and Delphi.

srika

I always wondered how Delphi could go under and GM not be affected...

Edward'TLS

This is a natural step every inefficient company has to go through to survive the real world. Survival of the fittest.

Maximized

I love the UAW's reaction. Another reason why the UAW is a huge joke!

mrdeeno

The funny thing is that this is no joke to the UAW.

They KNOW that they don't deserve what they have received for years, but they continue to fight for what they DON'T DESERVE and will do whatever is needed to hold onto that.

CGTSX2004

iTrader: (1)

This is step in the RIGHT direction for GM and a nail in the coffin for the UAW. I'm looking forward to watching the UAW squirm.

Risky

Laugh now When big bussiness breaks the unions none of use will be able to afford a tl.

CGTSX2004

iTrader: (1)

How is the UAW going out of business going to adversely affect the price of cars?

Crazy88

UAW is shit.

Maximized

Obviously we are dealing with someone whom doesn't have a clue. The UAW and their concessions drive the cost UP on American cars.

Risky

You kids need to read your history books. The reason you have vactions , pensions and insurance from your work place is because of the unions. Granted some unions have become to strong for their own good. There was blood shed getting unions started . If they break the unions in a matter of a few years your wages will be cut in half. As for not having a clue I have worked both sides of the fence as a tech for john deere dealer non union and the last eighteen years for a cat dealer union. My way of life has improved substantially. If you don't think other companies won't follow what happens with delphi if they get the contract voided. Even companies that don't have a union work force will start to cut benifits because of this precedent.

Maximized

You need to read an economics book or a newspaper. Unions were needed BEFORE OHSA and the Department of Labor. Now, they are archaic and not needed. The UAW hinders GM and Ford against their competitors. Please show me how I am wrong? You can't because the data is on my side. I work a non union job, so please explain to me how my wages will be cut in half All I see above is the same Union mentality that if we aren't here the US worker will suffer, which is false. If the UAW doesn't make drastic changes, the US workers for Ford and GM might be out of jobs for good.

I've seen various trolls here, but never a Union troll.

CGTSX2004

iTrader: (1)

You've gotta be kidding me...

Like maximized said, pick up an economics text book sometime.

If the UAW keeps up what it's doing, it's going to mean tens of thousands, if not hundreds of thousands, of jobs lost. Better to have a slightly lower paying job than no job at all.

Stevens24

Honda doesn't use Union labor.

Risky

say what you want management blames labor, labor blames management. the biggest problem gm has is not actually the hourly wage but escalating health care cost which every employer in america faces. Stale product doesn't help either.

Maximized

Blame the union for that. When GM/Ford/Chrysler was prosperous, the UAW took advantage of this in terms of benefits. Now GM/Ford are on the fringe of bankruptcy and the UAW is accustomed to the benefits they have had for so long. GM and Ford is doing what a business in its position should do, but that doesn't jive with the greedy union's adenda. For example, explain to me what the purpose of the "Job Banks" are? The only way the "Big 3"(as it was once known) will remain competitive is to remove the job bank entirely, cut Union jobs, and make concessions in regards to healthcare. The UAW will either A. Make large concessions or B. Drive 2 of the largest American corportations into bankruptcy court.

mrdeeno

In the profitable days of the big 3, the UAW milked it for all it could and LOCKED in the "milk" with these ridiculous contracts.

Now that the big 3 has run out of milk, the UAW is continuing to try to squeeze milk out of a rock.

They can keep squeezing, but if they don't let up, the rock will crumble.

Edward'TLS

Private companies of all sizes have been trimming inefficient labour practices and resources to survive the competition for years. Why do companies who employ union workers are exempt from this road to return to profitability ? Clearly the time has come to be their turns.

By buying union-worker-produced cars and products, we are actually paying more than the fair market price by substitution their unreasonably high wages and benefits.

M TYPE X

It's said that the union pressure on GM to keep plants open ... means a flood of cars in the market. The more new cars on dealer lots, the lower the price of the average new car.
If Ford or GM really move to cut production, every new car price is going to be affected,
including Acura TL, Infiniti G35, etc cars that you'd never cross-shop with a Ford Fusion or Pontiac Grand Prix.

CGTSX2004

iTrader: (1)

Not necessarily. If the unions were removed, Ford and GM could then switch to using a Just-In-Time production model used by just about every other major manufacturer these days. This would allow them to cut down on their inventory times, would allow their dealers to not maintain as much inventory, and allow them to price cars more in line with their actual costs instead of inflating the prices to allow for massive incentives because of the added cost of maintaining inventory.

SpeedyV6

True, but if GM were to fold and discontinue all of its operations you would have fewer carmakers serving the same market. Fewer competitors would mean less competition and expanded profit margins for automakers. Believe it or not we all benefit from GM's deep discounted fire sale pricing to clear out their inventories, even if we are buying Honda's and Acura's.

Ken1997TL

I have a history degree.. and I can say with 100% certainty that you're incorrect

mrdeeno

GM will not fold or discontinue operations, bankruptcy or not.

Just because a company files bankruptcy doesn't mean it closes up shop. It will continue business but in a more "efficient" manner with protection from creditors (and the UAW) while it gets its books in order.

subinf

That is not true across the board for labor unions. A huge benefit union workers have is the right to challenge termination/suspension. The just cause standard would evaporate if unions were no more.

Maximized

How does that help GM or Ford? It's a workers rights thing. The fact of the matter is that union workers(UAW) have exploited the Big 3 over the years. The Big 3 didn't have the balls to put their foot down, thus they are in this situation. Assembly workers making 50-70K putting windshields on a Taurus is a joke. They should be paid half of that IMO. The Job bank system is another joke. My dad just told me a story yesterday about the UAW affecting one of his customers. I won't mention the company's name, but it's a member of the UAW. Management of the company approached the union to TALK about reducing benefits, but not entirely. The union wouldn't even TALK to managament about making concessions. My father knows a lot of upper management in the company and basically this spells doom for the future of the company. Instead of making concessions, the Union is going to drive it's employees out of jobs and the company out of business. This is exactly what's happening to GM and Ford.

subinf

I was addressing the broad statement about unions in general.

As for the big three, as we've talked about before, I agree the union needs to get their shit together and start giving some of the rights back to management when they are at the table. there are some things, like healthcare, that unions have been dealing with for 50 years and i dont think that is going to change any time soon.

Maximized

Unions across the board hinder American companies IMHO.

The Big 2 plus Chrylser must grow some collective balls and hammer the union for concessions. The Job Bank program needs to be closed ASAP. That alone with save billions of dollars almost immediately. Next, Healthcare benefits need to be cut. Hell, have the workers fund their own healthcare. They are way overpaid anyways.