Judge approves Delphi-GM-UAW attrition plan

[Variance]

Judge approves Delphi-GM-UAW attrition plan By Nick Zieminski

Fri Apr 7, 6:43 PM ET

Bankrupt auto parts maker Delphi Corp. (Other OTC:DPHIQ - news) won court approval on Friday for its attrition agreement with former parent General Motors Corp. (NYSE:GM - news) and the United Auto Workers Union.

The deal frees Delphi to offer GM-funded retirement incentives to about 13,000 UAW members, and allows 5,000 workers a chance to return to factory jobs at GM.

Delphi, which last week asked the court for permission to reject its labor contracts, has described the attrition plan as a first step to slashing wage and benefit costs and reversing losses in its U.S. operations.

"We believe that it's not only a good exercise of business judgment, but it's fundamentally right to offer as many options to our labor force as we can," Delphi lawyer Jack Butler said.

"We believe this program provides a menu of options that will make the transformation softer than it otherwise would be," he added.

In his ruling, Judge Robert Drain agreed with that argument, saying the agreement provided an important option for UAW workers.

"This right is significant in that there is tremendous uncertainty with regard to the future of the debtor's operation and the future of the collective bargaining agreement," Drain said.

Drain also said negotiating a new union agreement may be easier as a result of his approval of the attrition program.

Delphi on March 31 filed court papers to reject its labor contracts after failing to reach agreements with its unions or GM on the more contentious aim for wage and benefit cuts.

The UAW has said a long strike would be unavoidable if Delphi eventually imposed wage and benefit cuts, though Delphi has said it expects talks to continue.

Delphi's Butler did not comment on the status of labor talks, and said he could not estimate how many workers would take the retirement deal.

"These are personal situations. They are family situations, people have to talk to their spouses and their children," Butler said, adding that Delphi would seek similar retirement deals with its other unions.

Delphi has about 33,100 U.S. hourly workers, including 23,300 represented by the UAW and 8,500 by the International Union of Electrical Workers-Communications Workers of America.

Drain also said he would approve a cooperation agreement between GM and unsecured creditors. The creditors' committee had asked for GM documents detailing its ties to Delphi so it could estimate the scope of GM's claim.

Lawyers for GM said in court that the claim could exceed $4 billion if all eligible workers opt into the attrition program.

Link: http://news.yahoo.com/s/nm/20060407/bs_nm/...wN5bnN1YmNhdA--

[ellives]

"Growing too quickly?" What the heck does THAT mean? GM hasn't been in "growth" mode for decades. Their problem has been simply not acknowledging the change in the competitive landscape and actually doing something effective about it. It has nothing to do with managing growth.

If the UAW is to survive, they are going to have to radically rethink their relationship with their "hosts." The 2007 contract will have to be written in a way that establishes efficiency goals and rewards. Nobody knows where the inefficiencies are better than the people actually doing the work.

its a good thing that so much wheelin and dealing has been going on recently.  I think that GM has really been trying to get on the right track.  Its painful that its come to this but they really got too big for their own "britches"--whatever the hell a britch is... and now its time to tidy up.  it just downright sucks that real people will feel the effects.

  but regardless the company is too big and they need to do some trimming.

its painful now and lets hope the long term justifies the means.

the UAW is a great union.  the benefits and everything have been wonderful.  almost too much so.  if that makes any sense.  lets face reality.

the company needs to survive and it would be a terrible shame if something stood in the way of that, the all or none attitude shouldnt apply to this predicament.

yeah, its sad it happened in the first place but i hope it can be rectified.  do what needs to be done now, keep the majority working like they always have and hope they can grow and continue to grow. 

maybe in the least learn a lesson in growing too quickly and the ramifications.

i just hope the unions dont sacrifice the whole for a minority, as callous as that might sound.  with no general motors there will be no workers at all. period.

[ellives]

Again... you need to explain your basis for the statement "got very fat very fast." In today's business environment, "fast" would be considered a few years. I don't believe GM fits this profile. Even if we can all agree with your premise, (I don't) the issue with GM has not be managing growth but responding to a decline. They've had plenty of time and now they have to pay the piper.

agreed, but it can be argued that GM got too big to ever have an effective method of operation.  as the worlds biggest they got very fat very fast and exanded perhaps beyond its capability.  similar to spreading your forces TOO thin.  the sheer size prevented any kind of meaningful adaptation to a changing environment. 

  i haven read the delorean book, and dont know if it has any merit, but i think he touches on many of the shortcomings that he supposedsly noticed. 

  more so even toyota has been learning and using lessons from GMs playbook.  their growth has been slow, steady, and calculated.  its a helluva lot easier to cruise in GMs wake.

  now the fat needs to be cut from all the levels of management down to the true workers.  hence the restructuring.  they are calling it a north american turnaround for a reason.

[Robert Hall]

Again... you need to explain your basis for the statement "got very fat very fast." In today's business environment, "fast" would be considered a few years. I don't believe GM fits this profile. Even if we can all agree with your premise, (I don't) the issue with GM has not be managing growth but responding to a decline. They've had plenty of time and now they have to pay the piper.

Agreed, I don't think GM has been growing much at all, it's that they have been loosing market share for a long time---contracting---but not shrinking correspondingly as a company...

They are still staffed like they still have 40% of the market when they can expect maybe 20% by the end of the decade, I think....