GM parts supplier Delphi plans to axe 24,000 jobs: reduce hourly wage from $27 to $9; pay managers bonuses worth $90m

GM parts supplier Delphi plans to axe 24,000 jobs: reduce hourly wage from $27 to $9; pay managers bonuses worth $90m
By Finfacts Team
Nov 20, 2005, 17:11

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Delphi CEO Steve Miller
Former General Motors parts unit Delphi, which is in bankruptcy protection, has said that it will close all its US plants unless trade unions agree to wage cuts to rescue America´s largest auto parts-maker.

Delphi CEO Steve Miller, who received a signing-on hello bonus of $3.7 million last summer, said that he hasn´t received union counteroffers to his proposal, which includes reducing wage levels from an average $27 per hour to as low as $9 and slashing up to 24,000 jobs over a three-year period. Motor union UAW President Ron Gettelfinger called Delphi´s offer an "insult."

"We are going to try and save as many jobs as we can, but at the current wage rates, we would have to close down all of our US plants," Miller said. Delphi will pay an average US wage of $26.97 an hour in 2005.

Delphi was spun off from General Motors in 1999 and a strike could cripple both the parts maker and its largest customer GM.


Last Wednesday, loss-making General Motors´ stock fell to a 14-year low - it fell 6 percent to $21.29, its lowest level since 1991 and embattled chief executive Rick Wagoner was compelled to issue a statement to employees that the company has "absolutely no plan, strategy or intention" to file for bankruptcy. Despite the firmness of the intentions, there is a Custer´s Last Stand feeling about the strugggle of the onetime icon of industrial America, to pull the fat from the fire.

Delphi filed for court protection in October after Miller failed to win concessions from unions and financial help from former parent General Motors. Miller has said he will ask the bankruptcy court to let the company impose terms if unions don´t agree to pay and benefit reductions by December 16th.

The UAW, along with Delphi´s other trade unions, said its primary focus in coming weeks will be to expose and challenge generous executive compensation packages Delphi is proposing for senior management.

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edited to 50%

Last Edited by SPUD on 09/11/2011 09:26 PM