Published: October 10, 2006 05:31 pm      

The changing face of Delphi

Many questions remain a year after company declared bankruptcy

A year ago today, an announcement that had been rumored for several weeks and feared by thousands was made — Delphi Corp. had declared bankruptcy.

The announcement came just nine days before a change to the U.S. Bankruptcy Code.

It immediately left employees wondering about the future of not only the company, but their own lives.

Over the past year, however, little of substance has happened. Nothing has been decided in bankruptcy court in regards to Delphi’s business plan or its wage and benefit proposals.

A General Motors-backed program to help Delphi become fiscally healthy by cutting deeply into its hourly work force represented by United Auto Workers and International Union of Electrical Workers was successful as more than 20,000 hourly workers will be gone by Jan. 1.

To counter those departures, some facilities — including Kokomo — have been hiring temporary employees at considerably lower wages and without benefits.

“We never dreamed the bankruptcy would drag on this long either. While they’ve postponed the bankruptcy hearings, our members continue to get good wages,” Sona Camp, president of Kokomo’s UAW Local 292, said, “but it just drags the pain out longer.

“Delphi has said it will give us anything GM will pay for. Other than that they haven’t come off the November proposal. They said there is progress being made but it may not be with the UAW.”

Delphi went to bankruptcy court seeking to have its labor agreements with the United Auto Workers, among others, voided and the ability to cut health benefits for retirees.

A November proposal sought cutting wages of hourly workers from an average of $27 per hour to $13. In April, an hourly wage scale of $16.50 was proposed if General Motors, its former parent company, would foot part of the bill.

Those proposals still sit on the desk of Judge Robert Drain in New York. After completing its case in June, every scheduled court date has been postponed at Delphi’s request.

Stakeholders, such as creditors, the UAW and GM, have yet to have present their first witness.

The company presented its plan to come out of bankruptcy at the end of March which would drastically reduce its 27,500 union-represented employees as well as 8,500 salaried employees and eliminate 21 of its 29 manufacturing facilities. Instead, the plan would focus on eight core facilities, including Kokomo, which is headquarters to its Electronics & Safety Division.

Delphi, according to spokesperson Claudi Piccinin, is continuing as it did before filing.

“Our overseas operations haven’t been affected. All of the things that were said when we filed remain true today,” she said. “That is a testament to the planning that went into the bankruptcy decision. Employees have been being paid, customers are getting deliveries and we’re operating as we have.”

In April, GM agreed to provide bonuses to Delphi employees who took one of three retirement programs. After that program’s deadline passed in June, it was announced that Delphi employees would be allowed to return to GM and another set of retirement packages and buyouts of those ineligible to retire.

In all, the attrition programs and buyouts have lowered Delphi’s hourly work force to 6,400 from the 27,500 it employed June 1. In addition, another 5,000 employees have left to return to GM.

Automotive industry analysts believe that Delphi will come out of bankruptcy and compete in the world automotive market.

“I think it’s one of those things that is going to fade away. At some point, Delphi will come out of bankruptcy,” said David Cole, executive director of the Center for Automotive Research in Ann Arbor, Mich. “I think things are coming together. Maybe faster than some expected and in a pretty positive way.

“Kokomo will be a part of Delphi and it will be a critical part. The reason [the bankruptcy] will fade away is the buyouts. They’re getting rid of 20,000 legacy employees. That was a huge problem but the huge wages are disappearing and the urgency is going away too.”

The postponements have come because Delphi believes it can reach agreements with the unions, GM and creditors.

“We are still in the process of negotiations. Our talks continue with our stakeholders with the goal of reaching a consensual agreement,” Piccinin said. “We have been focused on that for quite some time and have made progress.”

Here in Kokomo, the attrition programs, buyouts and flowbacks will result in nearly 2,000 of UAW Local 292’s 2,200 members being gone by Jan. 1. And the other 200 have until Dec. 31 to request the option of flowing back to GM.

“We’re in the midst of a total changing of the work place, of the work force,” Camp said.

“Approximately 2,000 members are leaving or are in the process. We’re replacing them with the new hires who are happy to get jobs that pay $14 per hour. Most of them are coming in from someplace where they made half that.

“They have hopes of making more and getting benefits when they’re made permanent employees and we feel they will be made permanent employees.”

Camp believes Delphi’s future is good, but that won’t mean much to the people leaving.

“I feel like this company will survive and that there will be good work in the future,” she said.

“For instance in hybrids, that’s a lot of our future. Hybrids help protect the environment and will help us cut back our dependency on oil. We’re getting in on the ground floor of that. That’s a big, strong plus for our business here. I think they’ll be fine.

“In the meantime, the new people coming in, I think they’re doing an excellent job. I’m proud of them and I believe they’re going to be good, strong union members. Quite a few of them are coming to our meetings. The sad thing is they’re going to have to negotiate 40 years of gains the UAW had negotiated already.”

John Dempsey may be contacted at (765) 854-6739 or by e-mail at john.dempsey@kokomotribune.com



By the numbers:

29,200: Electronics & Safety Division employees, hourly and salary, company wide

27,500: Total number of union employees, mainly UAW, in United States as of June 30

20,100: Number of union employees who have accepted retirement or buyouts

5,200: Approximate number of Delphi employees in Kokomo

2,200: Number of UAW 292 members

1,400: Total hourly employees who will still be employed nationwide

1,185: 292 members who accepted one of original attrition plans

200: Total number of 292 members who will be employed as of Jan. 1