Truck and Barter

Delphi, the major auto parts supplier, is demanding wage cuts of up to 50% from the UAW, and billions in bailouts from GM, or it will file for bankruptcy:

DETROIT -- Delphi Corp., one of West Michigan's largest employers, wants United Auto Workers members to accept wage cuts of more than 50 percent and eliminate layoff pay to help the auto supplier effort to stave off bankruptcy, according to UAW leaders at an Indiana plant.

Delphi, with plants in Coopersville and Wyoming, seeks to slash wages from an average $27 an hour to $10-$12 an hour and eliminate a jobs bank that gives full pay to 4,000 laid-off workers, officials from UAW Local 292 said in a letter, which was posted Thursday on a union Web site.

That would mean a $35,360 cut for a worker currently earning more than $56,000 a year. At $10 an hour, it drops to $20,800.

Local workers contacted by The Press today said they are shocked by such a drastic cut that would put their pay below many of the nonunion plants in the area.

I don't know what's more incredible, that wages will be cut so drastically, or that union power managed to make them so much higher than those received by non-union workers:

S&P said Delphi suffers from an uncompetitive business structure because of the wages and benefits of its U.S. hourly workers, which were set by GM before it spun off Delphi. Delphi's hourly wages are twice that of competing auto suppliers, S&P said.

Of course, the stock is plunging:

Delphi's stock, which has traded above $9 during the last 12 months, fell 95 cents to $1.25 on the New York Stock Exchange. Earlier it fell as low as $1.03.

Meanwhile, shareholders and former executives are suing because of alleged sham transactions, and economists note that losing Delphi could cripple local government budgets.

Of course, the top 21 executives have been well taken care of so they don't jump ship... One presumes many rank-and-file employees facing the big cuts have already tried to retire or leave...

Also, the comments at autoblog are worth a look.