CHICAGO – Unions representing nearly all of bankrupt auto parts maker Delphi Corp.'s (search) U.S. hourly workers said on Monday they have formed a coalition to fight proposed wage and benefit cuts they called an assault on working families.
The United Auto Workers (search), IUE-CWA, United Steelworkers, International Brotherhood of Electrical Workers, International Association of Machinists and Aerospace Workers and International Union of Operating Engineers said they formed the coalition Thursday.
"We are outraged by Delphi's attempt to use the bankruptcy process to dictate the radical destruction of the living standards of America's industrial workers ...," the coalition said in a statement.
Unions leaders said the cost-cutting demands are especially hard to swallow when Delphi also plans cash and equity bonuses for several hundred executives as incentives to stay with the company through its reorganization.
The statement did not say how the Mobilizing@Delphi coalition (search) would fight Delphi on the proposed changes, though USW spokesman Marco Trbovich said the unions want alternative solutions to save Delphi, not a strike.
"Radical surgery like that proposed at Delphi is no solution at all," Trbovich said. "It is a formula for demise, if not confrontation."
Delphi on October 8 filed for the biggest bankruptcy protection case in automotive history. It has said it must cut high wage and benefit costs inherited from former parent General Motors Corp. (NYSE:GM - news) to reorganize its U.S. operations.
"We continue to work with all of our unions in hopes of reaching a consensual agreement before the end of the year," Delphi spokesman Lindsey Williams said.
The company in October told its major unions it must cut wages to as low as $9 per hour — from about $27 per hour — to compete with U.S. suppliers where wage and benefit costs can be one-half to one-third as high as Delphi's.
Delphi also seeks steep cuts to benefits including dental and vision and the flexibility to close plants and cut jobs for its reorganization. The company has said it would begin the process of rejecting its union contracts if it did not reach agreements with the unions by mid-December.
Troy, Michigan-based Delphi has about 50,000 U.S. workers, including 34,750 hourly employees.
The six unions represent about 33,650 Delphi U.S. hourly workers, with more than 5.5 million active and retired members that also offer their support, the coalition statement said.
"Together we will do everything possible to make sure their rights and interests are protected," the statement said.
The UAW, IUE-CWA and steelworkers represent almost all of the hourly workers under union representation at Delphi.
The IAM represents only about 50 pattern makers at a Delphi operation in Milwaukee but intends to be an active coalition member given its experience with multiple U.S. airline bankruptcies in recent years, spokesman Frank Larkin said.
"The restructuring being proposed at Delphi is so extreme and so destructive that the company may have to find a way to file for moral bankruptcy as well," Larkin said, citing the size and extreme cuts proposed.