NEW YORK – A deal could soon be reached to offer thousands of workers at bankrupt auto parts supplier Delphi Corp. lump-sum payments of $70,000 to $140,000 to leave the company and their health-care benefits, The Wall Street Journal said on Thursday.
Talks among the auto parts supplier, its former parent General Motors Corp. (GM) and their unions to restructure Delphi have made substantial progress in the past week, the newspaper said, citing people familiar with the deal.
Delphi and GM are also close to offering Delphi's five smaller unions early-retirement packages similar to the $35,000 packages that were offered to the United Auto Workers union in March, the newspaper said, citing three sources.
The lump-sum buyouts and early retirement offers could be announced as early as next week, the Journal said.
Delphi, based in Troy, Michigan, wants to cut wages to near $12.50 from about $27 per hour and cut four fifths of its hourly work force of 33,100. The company filed for Chapter 11 bankruptcy protection from creditors in October.
A comprehensive deal to cut Delphi's work force and reduce its labor costs isn't imminent and won't be announced before a UAW convention next week in Las Vegas, according to the Journal's sources.
Delphi and GM have made "substantial progress" on 21 of 29 U.S. plants that Delphi wants to eliminate, the report said. The process includes GM working with Delphi to close about 10 plants and sell the rest to buyers that GM will find, it said.
GM must find new suppliers for the plants that close.
Delphi could be left with just 6,000 to 7,000 hourly workers when it exits bankruptcy if the plant sales, buyout and early retirement offers go as expected, the Journal's sources said.
A soft-landing for most of Delphi workers could greatly reduce the chance that unions would feel compelled to call a strike to protect their contracts, the newspaper said.
The threat of using bankruptcy to void its contracts has prompted the UAW, its biggest union, to authorize a strike.