Delphi's latest action could mean dark days for GM

| Friday, March 31, 2006

Unable to reach a deal with workers, automotive parts supplier Delphi Corp. announced Friday, March 31, it was asking the U.S. Bankruptcy Court for authority to chuck its labor agreements with unions in order to begin a sweeping reorganization plan.

Along with tossing the United Auto Workers contracts, the plan includes closing one-third of its plants. According to CNN, the plant closings means shedding 28,000 jobs.

Delphi also plans to dump 8,500 salaried workers, make pension changes, and rework commercial supply agreements with General Motors Corp.

Instead of the regular 14 days, the court has provided a five-week period between the Friday filing and the next hearing in an attempt to give Delphi and its unions more time to hammer out an agreement and avoid a strike.

A strike would deal a devastating blow to GM’s efforts to recover from a $10.6 billion loss in 2005. General Motors, which is Delphi’s former parent company, buys about $15 billion worth of automotive parts from the supplier annually.

Comments