UAW plans to give Delphi 'final offer'
WASHINGTON -- A senior United Auto Workers official told local union leaders Wednesday that the UAW will make a "comprehensive final offer" on labor costs to bankrupt auto supplier Delphi Corp., a person who attended the meeting said.
UAW Vice President Cal Rapson, in a meeting with General Motors Corp. and Delphi Corp. local UAW presidents and plant chairmen, said the union would make a last-ditch, final offer to try to resolve outstanding issues between Delphi, its former parent GM and the private equity investors that have offered to buy a majority of the supplier and allow it to emerge from bankruptcy protection.
The meeting was held in Detroit to discuss proposals and resolutions in advance of contract talks this summer with Detroit's Big Three automakers.
The News reported Tuesday that the UAW was expected to present a comprehensive counterproposal as early as this week.
That proposal is now expected to be delivered either Friday or Monday, according to people familiar with the meeting. The proposal is expected to codify some of the concessions the union has made at the bargaining table in the last few months.
The UAW may agree to Delphi's request to close 21 of 29 U.S. plants, although the union has studied some marginally performing plants in a bid to convince Delphi to keep them open.
"You have to be dumb or blind to not know that they are going to close these plants," said Skip Dziedzic, president of UAW Local 1866 in Oak Creek, Wis., who was not at Wednesday's meeting in Detroit.
An agreement between the UAW and Delphi is crucial to the investors' plan to purchase the Troy-based auto supplier and bring it out of bankruptcy as a newly capitalized company.
The deal is in jeopardy.
The UAW turned down at least two offers from Delphi that would have meant deep pay cuts. And a key investor, Cerberus Capital Management, is withdrawing from the deal, further delaying matters. Cerberus had agreed to invest up to $1.7 billion in Delphi.
If the UAW puts a proposal on the table, as people at Delphi and the private equity investors expect, it could jump-start the process.
In January, a judge approved a plan by the investors to invest $3.4 billion to own up to 72 percent of Delphi and control a majority of seats on the board.
Cerberus is backing out, but the remaining investors who agreed to buy Delphi -- Appaloosa Management LP, Harbinger Capital Partners, Merrill Lynch & Co., UBS Securities LLC and Goldman Sachs -- are expected to continue under amended agreements.
Delphi also must reach agreement with GM, which has said it expects resolving its issues with Delphi to cost between $6 billion and $7.5 billion.
Publicly, the UAW has ceded no ground to Delphi, and the union's president Ron Gettelfinger has repeatedly excoriated the "greed of company officials."
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