From Dayton Daily News

DAYTON, OH -- General Motors Corp. can take a significant step to address its costs and help struggling parts supplier Delphi Corp. by agreeing with the United Auto Workers union on an early retirement program for production workers, an industry analyst said Monday.

"The most important thing, by far, is to interject some certainty into this process. And, at this point, there is not a whole lot of certainty," said David Cole, chairman of the Center for Automotive Research in Ann Arbor, MI.

GM, Delphi and the UAW have said they are discussing a program to offer early retirement buyouts. Such a program could help GM, the world's largest automaker, toward its stated goal of reducing its hourly work force by 30,000 between now and 2008.

An agreement would also allow GM to get a more precise estimate of what it must eventually pay for workers' retirement benefits and could open up jobs that former GM employees now at Delphi could return to, under a deal reached when GM spun off Delphi as an independent company in 1999. GM has said it could face costs of up to $12 billion for the retirement benefits of former GM workers at Delphi.

GM, UAW and Delphi spokesmen said there was nothing new to report from their talks Monday. But news reports indicated progress is being made, and industry analysts said they were encouraged.

Last week, GM announced it was increasing its estimated financial loss for 2005 by $2 billion to $10.6 billion, in part to cover GM's retirement-benefit liabilities related to Delphi's bankruptcy reorganization filing in October.

Delphi has told its major unions for hourly workers that it must reach agreements with them on new, lower-cost contracts by March 30 in order to compete with other parts suppliers. Failing that, the company said it will ask the U.S. Bankruptcy Court on March 31 for permission to throw out the current labor contracts, impose new ones and terminate post-retirement health care plans and life insurance.

Delphi on Friday informed the Securities and Exchange Commission that the company will delay filing its 2005 financial statement until it knows the outcome of the discussions on its restructuring, including labor cost reductions.

Copyright 2005 Dayton Daily News. All Rights Reserved.

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