From Detroit Free Press

TROY, MI -- Delphi Corp. delivered a proposal to its labor unions Friday that calls for deep wage and benefit cuts, sparking an immediate howl of protest from the UAW.

"Delphi's proposal is designed to hasten the dismantling of America's middle class by importing Third World wages to the United States," UAW President Ron Gettelfinger and Vice President Richard Shoemaker said in a statement Friday afternoon.

Neither the UAW officials nor Steve Miller, CEO of the automotive supplier, now in Chapter 11 bankruptcy, would reveal details. But Miller said the package was similar to the sharp concessions Delphi sought from the UAW prior to filing for bankruptcy Oct. 8, which include wages as low as $10 an hour, which would be a cut of about 60 percent for some workers.

"I think that it's ridiculous," said Todd Jordan, who works at a Delphi electronics plant in Kokomo, IN. "The problem is that we have a living standard based on this $26 an hour, and right now we're living within our means. Now we're going to have to file for bankruptcy." Jordan said he has a pregnant wife and a 6-year-old daughter who depend on his income.

A message posted Friday on a Web site of another large Delphi union, the International Union of Electrical Workers, said the company wants to eliminate 5,500 of its 8,500 IUE workers through plant sales, closings, retirements and layoffs. Delphi said it plans to close six of the 10 facilities represented by the IUE, the union said.

The message said Delphi also proposed lowering wages to $9-$10 an hour for production workers and dropping dental and vision coverage.

IUE President Jim Clark said he was "pretty confident" that Delphi was seeking similar concessions from the UAW and the United Steelworkers.

Delphi and its unions must agree on revisions to labor agreements by mid-December or Delphi will ask the bankruptcy judge for permission to void the contracts. In an interview Friday before the UAW statement, Miller told the Detroit Free Press that he expected the unions would regard the proposal as "very contentious and difficult to swallow."

He was right.

"But what choice do we have?" asked Miller, who has repeatedly stated the wage-and-benefits costs of Delphi's union workers -- many of whom were General Motors Corp. employees before the 1999 spin-off that created Delphi -- are two to three times the prevailing pay at other U.S. parts makers.

"We're broke," Miller said several times. "What we have presented them is what we think is required in order to operate and attract capital and bid for business in the auto parts sector."

Miller said Delphi's union workers will be better off if the UAW and other unions negotiate new concessionary deals than if a bankruptcy judge voids existing contracts and allows Delphi to pay workers whatever it wants, which could trigger strikes by angry workers.

"That is such chaos," Miller said. "Nobody wants to go there. And that is why things get settled. ... Both sides have huge motivation to get to an agreement."

Asked about the possibility of strikes that could disrupt the flow of parts to Delphi customers, Miller replied, "Any plant that wants to be at the top of our plant closure list should engage in industrial action as a way of sending that message."

But at least one worker said he's willing to take that chance.

"I'd rather walk off the job knowing I'm standing up for what I believe in," said Gary Krantz, 31, a five-year employee at a Delphi thermal plant in Lockport, NY.

Krantz says that if Delphi drops his wages to $10 an hour, "it's either this or McDonald's."

IUE President Clark, whose union received Delphi's proposal Thursday, said it's early in the negotiating process but that there's a huge gap between Delphi and its unions.

"Obviously the company has financial issues we have to address, and we're willing to sit down to make ourselves more competitive and work towards that. But I'm afraid they asked for way too much," he said.

In the interview, Miller, 63, defended his blunt public statements that Delphi can't compete in auto parts with production workers who have wage-and-benefits packages that total $65 per hour, including an hourly wage of close to $30.

He made a conscious decision to speak openly and frequently on the issues facing Delphi before and since the Oct. 8 bankruptcy filing.

"Things will be written about you," he said. "The only question is, do you want your point of view included, or not?"

He said he understands the stinging criticism in public statements from Gettelfinger and hundreds of e-mails from Delphi employees.

"I get many notes from hourly workers, a lot of them angry. And they say some unkind things about me," Miller said.

"I don't like having to be the messenger. That's why I said the other day I was going to forget being paid," said Miller, who said this week he would cut his salary to $1. "I don't want to have to apologize for making a lot of money while I'm having to tell these people what's going to happen in their lives."

Miller took a lot of heat when the Delphi board extended severance-pay arrangements in case of job loss for 21 top corporate officers on the eve of the bankruptcy filing, a move that Miller insists is costing the company nothing and was widely misunderstood.

Asked about criticism of that move and his own $3-million signing bonus to take the CEO's post in May, Miller said, "Executive character assassination is the blood sport of collective-bargaining Olympics."

Copyright 2005 Detroit Free Press. All Rights Reserved.

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