Delphi outlines plant closings, wage-cutting in US bankruptcy filing

Speaking to the Wall Street Journal, Delphi CEO Robert Miller said he will close or sell off a “substantial segment” of the company’s 45 factories and renegotiate the contracts and pension plans of Delphi’s workforce. The company had previously targeted 11 “underperforming” plants in the US for closure or sale.

The wave of plant closings will have a devastating effect on industrial towns like Flint and Saginaw, Michigan; Dayton, Ohio; Rochester, New York; Kokomo, Indiana, and dozens of others that have long suffered from the decline of the US auto industry.

Delphi informed the bankruptcy court that it would terminate health and life-insurance benefits for its retirees in mid-December. Under its union contracts, Delphi pays for the health-care costs of 109,400 active hourly workers, retirees and their families. According to Miller’s affidavit to the court, Delphi’s hourly pension, health-care and other retiree costs were underfunded by $10.4 billion at the end of 2004.

Delphi said its former parent company, General Motors, was responsible for the pension benefits being paid to retired Delphi workers, under the terms of the agreement made when GM spun off its parts division in 1999. There is widespread speculation that Miller also intends to dump the pension plan for current employees, as he did previously when he took Bethlehem Steel through bankruptcy proceedings.

Delphi asked Judge Arthur J. Gonzalez to set a two-month deadline for obtaining significant concessions from the United Auto Workers and other unions and retirees. Under Delphi’s proposed schedule, the company would make offers to its unions by October 21 and if no agreements are reached by December 16, the supplier would ask Gonzalez to set the process in motion to terminate the contracts and health-care benefits at a hearing on January 17.

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http://www.wsws.org/articles/2005/oct2005/delp-o11.shtml