Delphi Files Motion To Dismiss Contract

[Guest Josh]

Delphi Outlines Transformation Plan

Outlines strategic path to 2007 emergence from Chapter 11

Continues negotiations with U.S. unions and General Motors toward consensual agreement to transform to a competitive U.S. labor cost structure

Initiates "dual track" Bankruptcy Court process to reject collective bargaining agreements and certain unprofitable General Motors contracts

Company will retain and grow core business product lines and realign manufacturing footprint; non-core businesses to be sold or wound-down by 2008

Global salaried workforce to be reduced by 25% through portfolio and product transformation and SG&A cost savings initiatives

Hourly and salaried U.S. defined benefit pension plans to be retained but frozen by end of 2006; Delphi to implement competitive benefits packages for workforce and see pension funding solution

Release Date: March 31, 2006

Troy, Mich. — Delphi Corp. (OTC:DPHIQ) today outlined its strategy to prepare for its return to stable, profitable business operations through a broad-based global restructuring in order to complete the Chapter 11 cases for Delphi and 41 of its domestic U.S. subsidiaries in the first half of 2007 as previously announced. Delphi's transformation plan is intended to allow the company to become competitive in the global marketplace.

"We are clearly focused on Delphi's future," said Delphi Chairman and CEO Robert S. "Steve" Miller. "Emergence from the Chapter 11 process in the U.S. requires that we make difficult, yet necessary, decisions. To complete our restructuring process, we must focus on five key areas. First, we must modify our labor agreements to create a competitive arena in which to conduct business going forward.

Those are just snippits of the Press Release which can be viewed here http://delphi.com/news/pressReleases/pr75605-03312006

[Guest Josh]

GM Statement On Delphi Court Motions

DETROIT - General Motors Corp. (NYSE: GM) today said it is disappointed with Delphi Corp.'s (DPHIQ) decision to seek authority to reject certain supply contracts with GM but it remains committed to working with Delphi and its unions to reach a consensual agreement.

"We disagree with Delphi's approach but we anticipated that this step might be taken," said Rick Wagoner, GM chairman and chief executive officer. "GM expects Delphi to honor its public commitments to avoid any disruption to GM operations."

Delphi's motion for authority to reject certain GM supply contracts, as well as the company's motion to reject its labor contracts, is consistent with past practices of other suppliers in Chapter 11.

"Motions to reject labor agreements are fairly common in reorganization proceedings and we have seen this approach play out to agreed resolutions in other cases," Wagoner said. "GM will continue to work with Delphi, its unions and the court to achieve a consensual agreement that makes sense and is financially viable for all of the parties. We believe the special attrition program we agreed to with the UAW and Delphi last week is indicative of GM's commitment to reaching such an agreement."

GM's objective in the Delphi reorganization remains to ensure that Delphi can continue as a viable important supplier to GM on terms that make sense for both GM and its stockholders.

[Guest Josh]

UAW Statement on Delphi Filing 1113/1114 Motions

DETROIT – UAW President Ron Gettelfinger and Vice President Richard Shoemaker today issued this statement on Delphi’s announcement that it will file Section 1113 and Section 1114 motions today with the U.S. bankruptcy court in New York.

“Delphi’s misuse of the bankruptcy procedure to circumvent the collective bargaining process and slash jobs and wages and drastically reduce health care, retirement and other hard-won benefits or eliminate them altogether is a travesty and a concern for every American.

“Delphi’s proposal goes far beyond cutting wages and benefits for active and retired workers. Delphi’s outrageous proposal would slash the company’s UAW-represented hourly workforce by approximately 75 percent, devastating Delphi workers, their families and their communities.

“Delphi’s filing Section 1113 and Section 1114 motions with the U.S. bankruptcy court – like the quality of the proposals it has made to the UAW – is another indication that Delphi has never been serious about finding a solution to its current problems through the collective bargaining process.

“The changes touted in Delphi’s most recent proposal are entirely contingent on GM’s financial support, but GM has advised us and stated publicly that it has not agreed to provide that funding. In other words, Delphi’s latest proposal is basically a reiteration of its previous proposal.

“Last week, after many long, hard days and nights of negotiations, the UAW, GM and Delphi reached agreement on a Special Attrition Program that will reduce Delphi’s costs. That agreement, which was reached without an arbitrary, self-imposed deadline, created momentum that could have allowed the UAW, GM and Delphi to make progress in discussions focusing on other areas.

“Unfortunately, Delphi’s filing of its 1113/1114 motions kills that momentum. Indeed, today it appears there is no basis for continuing discussions.

“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.”

[Guest Josh]

It's gone nuclear. It's more than likely going to happen that the Judge will void the contracts, meaning a long, financially straining strike on General Motors.

This is bad.

[ZL-1]

Maybe this is just a move to pressure the UAW and GM, but I do hope everyone plays the game in a responsible way.

[daves87rs]

It's gone nuclear. It's more than likely going to happen that the Judge will void the contracts, meaning a long, financially straining strike on General Motors.

This is bad.

I hope GM got some back up suppilers..(which they have been working on..)

It's going to be interesting to see if GM is going to let Delphi break them or not..

It's time to dump Delphi.

A sad day indeed.

[daves87rs]

Maybe this is just a move to pressure the UAW and GM, but I do hope everyone plays the game in a responsible way.

Not going to happen.

[Guest Josh]

May 8th will be judgement day. That is when the court hears the case.

[Dragon]

It’ll probably come down to last minute, but I can’t see this going nuclear. Somebody(s) will cave before the May hearing because this will hurt everyone in the long run, even Delphi

[Cadillacfan]

GM should sue the pants off of Delphi for doing this.

Unfortunately, Delphi has no money so it would do nothing to help GM if they decided to go to court.

[drew770]

GM should sue the pants off of Delphi for doing this. 

Unfortunately, Delphi has no money so it would do nothing to help GM if they decided to go to court.

Not only GM should sue but Ford and Nissan since they also get parts from Delphi. I understand that Delphi is taking the tough road here but it is more than just the UAW that will be hurt by this.

GM can not take anymore hits to the balance sheet.

Gas prices is creeping up again, healthcare costs seems to keep increasing at an alarming rate and no high volume people mover from GM on the horizon.

I hope GM was smart enough to find alternative suppliers so the can keep production going.

[thegriffon]

They've arranged for the hearings to be pushed back three weeks later than normal, giving them five weeks to work things out. Some of he businesses are being sold—companies such as Magna and Johnson Controls are potential buyers.

[eaton53]

This is bad.

I don't see what bad about it except from the UAW perspective... for them it's a disaster because when they strike they will all be fired. Production will continue with a combination of salary and replacement workers. All Delphi has to do was build a little ahead.

General Motors Corp. (NYSE: GM) today said it is disappointed with Delphi Corp.'s (DPHIQ) decision to seek authority to reject certain supply contracts with GM but it remains committed to working with Delphi and its unions to reach a consensual agreement.

"We disagree with Delphi's approach but we anticipated that this step might be taken," said Rick Wagoner, GM chairman and chief executive officer. "GM expects Delphi to honor its public commitments to avoid any disruption to GM operations."

Maybe this means the stupid "you will give us an X percent reduction or else" type of deal? Good for them.

The changes touted in Delphi’s most recent proposal are entirely contingent on GM’s financial support, but GM has advised us and stated publicly that it has not agreed to provide that funding. In other words, Delphi’s latest proposal is basically a reiteration of its previous proposal

That GM will not subsidize their pay is a shock? Delphi builds parts for Toyota and others - should GM pay Delphi workers to build parts for Toyota? I think not... that whole proposal was a non-starter.

[mustang84]

This is like a movie where you already know the plot. It's playing out precisely, frame by frame.

[FAPTurbo]

I don't see what bad about it except from the UAW perspective... for them it's a disaster because when they strike they will all be fired. Production will continue with a combination of salary and replacement workers. All Delphi has to do was build a little ahead.

We knew that GM and Delphi saw this coming. I'm pretty damn sure they planned for this, and it is all going according to that plan. They may finally have a chance to ruin the UAW, or at least humiliate them.

I'm going to keep optimistic and even buy a few more GM shares. Sure, it's a rough time with high stakes, but they'll pull through.

... by the way, Mustang84, is that the "Crue" in your avatar? I think I can pick out Vince Neil And Mick Mars, but I ain't too sure.

[Ghost Dog]

the only way this works out is if Miller can be circumvented. Parties outside of Delphi have to get together with Gm and The U.A.W. They have to present an alternative to the judge.

[ZL-1]

Not going to happen.

Well, I still have some hope in people being fairly responsible, but I acknowledge that it is more likely that some fighting will occur.

I don't know anything about US Law, so I have a question: does a contract's termination via the judicial system mean Delphi can fire all of those workers and hire other employees?

[mustang84]

.. by the way, Mustang84, is that the "Crue" in your avatar? I think I can pick out Vince Neil And Mick Mars, but I ain't too sure.

Yep, it's a clip from the "Looks that Kill" music video.

[Hey Now]

This is like a movie where you already know the plot.  It's playing out precisely, frame by frame.

Yep. Just like in a horror movie when the main character's girlfriend's roomate starts going into the basement and the music starts playing......in the end, you know its going to end up bad.

[FUTURE_OF_GM]

Okay... I've said this time and TIME again...

WHEN will GM WAKE UP and start doing what's BEST for GM?!?!?!

GM has been the BIGGEST doormat that this country has ever seen. If they COULD walk on GM, they have (Foreign and Domestic)

It's going to get REALLY ugly folks.... The UAW is TOO STUPID to know their ass from a hole in the ground, Delphi (and Miller) has proven BLATANTLY now that they counldn't care less about GM's future. They ARE in essence, IMO, the ULTIMATE sell outs now having bertrayed and turned on their creator. (Who cares I guess, GM no longer holds the power anyway, they can get all sorts of excellent business from 'the transplants'---YEAH RIGHT, we all know those "we're american" companies don't ACTUALLY source from america that much)

GM It's time to start playing hard ball FOR ONCE. They want to make it nuclear? They want to toy with and ruin peoples lives? Then you build the biggest bomb!

In all reality though, I don't know HOW GM could've planned for this... Alternate suppliers maybe? But that's A LOT of work to line up.

[eaton53]

GM has been the BIGGEST doormat that this country has ever seen. If they COULD walk on GM, they have (Foreign and Domestic)

I not only think that GM is not only not a doormat in all this, but a very willing partner in wishing Delphi to throw the union out. The talk about wanting an agreement... lip service, since they can't play similar hardball with the unions for another year and a half.

[Hey Now]

I posted this on another site, but its relevant here:

Here's my take on this whole mess (it may be a little simplistic):

Who's to blame? Both GM and the UAW.

Should either party focus on who caused this? No, the past is the past. Unless somebody builds a time machine, that's not going to change.

The UAW is very quick to say at contract negotiations that if GM is doing great financially that they deserve some of the pie (i.e. are partially responsible for the wealth). But when times are tough and GM's losing money, they seem to take the stance of "We are not responsible, why should we be punished?" The pendulum swings both ways. GM is bleeding, the UAW needs to help (and I don't mean by finally accepting health care burden that is NOT representative of what Joe Q. American has been paying all along, I'm talking SERIOUS help, i.e. wage decrease, normal health care payout, etc..). Its seems to me that when GM is doing great (2001), the UAW says "Your success is due to our high quality people making high quality vehicles." but when GM bleeds, the stance is "Its management's fault."

I read an article (I wish I could find it to link to), that basically had a Delphi UAW employee saying that they were ready to strike even if it meant taking GM down in oblivion with them. How is this even logical??? Would you rather have a job offer for 50% of your pay or NO JOB AT ALL???

There are ALWAYS choices in life. If you are a Delphi UAW worker you are about to have 2 choices: A) take a lower wage or B) find a new job. That's it. No Option C) Keep your current job with same benefits. And if you take GM down with your strike, you do nothing but guarantee you will have NO job to return to. Think I'm wrong? Go ask the Northwest mechanics how their strategy worked.

[Petra]

Some of he businesses are being sold—companies such as Magna and Johnson Controls are potential buyers.

IIRC, Magna is the company that belongs to Belinda Stronach's daddy, right?

I said once before the last time this all came up that this is the biggest game of Chicken ever played out by GM. Either someone (the UAW, Delphi or GM) will cave, or everything will be destroyed. Personally, I'm not too optimistic that anybody will cave. The UAW and Delphi seem determined to go down with the ship before making concessions, and GM just doesn't have the guts to tell them all to get lost. That means there's only one thing that can come of this...

[eaton53]

That means there's only one thing that can come of this...

GM's largest supplier's costs are greatly reduced and the UAW is out.

It also sends a very strong message for 2007.

[ellives]

These comments by ANY union are typical posturing strategies. The real problem is the lack of any long term planning and strategic thinking here. Any contract should have considered thinks like GM's current financial situation. This is what contracts are... anticipations of what will happen in specific situations.

GM and their negotiators and lawyers own this ineptitude

I posted this on another site, but its relevant here:

Here's my take on this whole mess (it may be a little simplistic):

Who's to blame? Both GM and the UAW.

Should either party focus on who caused this? No, the past is the past. Unless somebody builds a time machine, that's not going to change.

The UAW is very quick to say at contract negotiations that if GM is doing great financially that they deserve some of the pie (i.e. are partially responsible for the wealth). But when times are tough and GM's losing money, they seem to take the stance of "We are not responsible, why should we be punished?" The pendulum swings both ways. GM is bleeding, the UAW needs to help (and I don't mean by finally accepting health care burden that is NOT representative of what Joe Q. American has been paying all along, I'm talking SERIOUS help, i.e. wage decrease, normal health care payout, etc..). Its seems to me that when GM is doing great (2001), the UAW says "Your success is due to our high quality people making high quality vehicles." but when GM bleeds, the stance is "Its management's fault."

I read an article (I wish I could find it to link to), that basically had a Delphi UAW employee saying that they were ready to strike even if it meant taking GM down in oblivion with them. How is this even logical??? Would you rather have a job offer for 50% of your pay or NO JOB AT ALL???

There are ALWAYS choices in life. If you are a Delphi UAW worker you are about to have 2 choices: A) take a lower wage or B) find a new job. That's it. No Option C) Keep your current job with same benefits. And if you take GM down with your strike, you do nothing but guarantee you will have NO job to return to. Think I'm wrong? Go ask the Northwest mechanics how their strategy worked.

[Guest Josh]

How can anybody blame the UAW after they have conceded a GREAT deal in the "agreement on buyouts" with both Delphi AND the UAW? They have agreed to reduce the workforce in unheard of ways.

Allowing General Motors to allow buyouts to all of its 114k Blue Collar workers is unheard of. Furthermore, allowing $140k to workers to just "walk away" without healthcare if another HUGE way the UAW has proved they are willing to work with General Motors AND Delphi.

Who is to blame?

Delphi. Robert S. Steve Miller. Him and only him. Both the UAW IUE/CWA and our prized company General Motors all asked him NOT to do this, yet he did it.

They were working towards a deal, and were at BEST two weeks away from a formidable deal. They all warned Delphi not to do this, yet Delphi did, no way Robert S. Steve Miller did because he's such a cut throat hard ass he can't see what he's just done to the American automotive business.

[eaton53]

They all warned Delphi not to do this, yet Delphi did, no way Robert S. Steve Miller did because he's such a cut throat hard ass he can't see what he's just done to the American automotive business.

That is exactly why Delphi hired him... to save the company, not bow to pressure from corrupt unions or weakling GM management. Edited April 2, 2006 by eaton53

[Ghost Dog]

That is exactly why Delphi hired him... to save the company, not bow to pressure from currupt unions or weakling GM management.

He's a destroyer.

And how is the Union corrupt? Where is the Deviancy? There is none. They are doing what they are supposed to do. Represent the workers and thier rights!!!!!

This whole exercise is about the $300 million Miller and his Cronies have targeted for themselves. This is GREED nothing more. This whole more viable crap is B.S.

[eaton53]

He's a destroyer.

And how is the Union corrupt? Where is the Deviancy? There is none.  They are doing what they are supposed to do. Represent the workers and thier rights!!!!!

This whole exercise is about the $300 million Miller and his Cronies have targeted for themselves. This is GREED nothing more.  This whole more viable crap is B.S.

And union leaders don't do the same? Don't be so naive.

Unions have been incredibly corrupt, not to mention linked often to organized crime. And their leaders will sell out the membership in a heatbeat if it suits their purposes.

Bottom line is Delphi is losing billions. Miller is doing his job.

Edited April 2, 2006 by eaton53

[Hey Now]

And how is the Union corrupt? Where is the Deviancy? There is none.  They are doing what they are supposed to do. Represent the workers and thier rights!!!!!

Here's a big one I remember off the top of my head:

http://www.nlpc.org/olap/UCU2/03_17_02.htm

It was so multi-layered, it took them 3 years after the strike to figure out what happened.