To avoid strike, bankrupt auto parts maker Delphi Corp. has offered $140,000 to its workers in exchange of wage concessions.
Delphi and United Auto Workers have signed the agreement. However, to implement, it needs consent of company’s 17,000 UAW members and a federal bankruptcy judge in New York. If auto parts maker succeeds to get unions and federal judge’s approval than the pact would end the threat of a strike.
Delphi, which lost $533 million in the first quarter and $5.5 billion in 2006, has disclosed its plan to restructure its business by reducing labor costs. Auto parts maker has made agreement with the UAW in which they will reduce labor cost to $14 per hour, from $28 per hour.
The proposed deal with union would provide three annual payments of $35,000 each for about 4,000 UAW workers who would see their hourly wages cut from Oct.
Auto parts maker has also shortlisted other incentives for the workers, to make their effort more transparent and viable. The company seeks to include all section of the worker departments and try to persuade them with lucrative deal.
• A $140,000 buyout for workers with more than 10 years of service and a $70,000 buyout for those with the company for less than 10 years.
• A $35,000 payment to encourage workers with at least 30 years of service to retire. Retirement benefits for workers age 50 and above with at least 10 years of service.
• A program for workers with at least 26 years of service that allows them to stop working but be paid as active workers at the lower rates until they reach 30 years of service and retire.
• $1,500 per month severance pay for every month worked - up to $40,000 - for all supplemental and temporary employees who choose to leave the company.
As per the restructure plan, Delphi will retain and operate four plants under a tentative agreement with the UAW. Company would also set to close at least 10 plants.
Via: MSNBC
