From Detroit Free Press

TROY, MI -- Delphi Corp. asked a bankruptcy court judge Thursday to postpone its hearing to cancel labor contracts and eliminate retiree medical and life insurance benefits. The judge complied, and the hearing has been rescheduled for Sept. 18.

Since filing for bankruptcy in October, Delphi pressed the need to get labor costs under control. Delphi hopes to get the bankruptcy court's permission to void union contracts as a way to reach that goal.

Delaying the hearing means that Delphi, General Motors Corp., their unions and other creditors have more time to agree on a cost-savings plan that could scrap Delphi's plans to cancel contracts and ward off any costly strike unions may attempt.

"We found the discussions today with the unions productive," Delphi spokesman Lindsey Williams told the Free Press. The new date "will provide further time for a consensual agreement."

Among the complex factors in developing a cost-cutting plan:

-- Delphi is running out of time and can't afford to stay in bankruptcy much longer.

While in bankruptcy, Delphi is paying hundreds of millions of dollars to lawyers and advisers, and its daily business operations are losing more than $100 million a month.

-- Delphi has said it would like to cut hourly wages by more than 50 percent from an average $27 an hour, but it needs former owner GM to subsidize wages or offer other financial support to make the wage reduction more palatable to the unions.

-- Delphi must find a comprehensive deal suitable to six independent industrial unions representing the company's 33,650 hourly workers.

The UAW, Delphi's largest union, voiced concern over the current negotiations.

"As we reported last week, talks had continued between Delphi, General Motors and the UAW but were at best disappointing," the union said Thursday in a statement on its website. "Events over the past week have not materially changed that assessment."

Thursday's rescheduling decision took place in a conference with U.S. Bankruptcy Court Judge Robert Drain in New York. The conference was limited to Delphi and anyone who filed formal objections or support for the auto supplier's motion to cancel union contracts and eliminate retiree medical and life insurance benefits.

The judge granted Delphi's request to postpone the hearing, which already had been postponed several times.

When the trial resumes on Sept. 18, "the UAW will present witnesses in support of our case that Delphi should be required to continue to live up to its labor agreements," the union said.

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