Delphi Workers Doubt Their Clout

By Katie Merx

A year and a half after their company entered bankruptcy court, Delphi Corp. workers are waiting for an agreement among the UAW, Delphi and GM that would assure them their pensions are secure.

But Delphi’s contract with the UAW ends in September. General Motors Corp.’s pension guarantee expires in October. And at the UAW convention in Detroit this week, top union leaders said they rejected the most recent offer Monday from Delphi because it fell “miserably short.”

“We’ve done more for Delphi than we should have done,” UAW President Ron Gettelfinger said Wednesday. “We gave them the two-tier agreement in ’04. We gave them the attrition program since they’ve been in bankruptcy, and there’s no end to it.”

While workers took some satisfaction in Gettelfinger saying an effort to nullify the Delphi contract in court would trigger a strike, it didn’t do much to allay concerns that their pensions could go up in smoke, thrown into the quasi-governmental Pension Benefit Guarantee Corp.

Left to the PBGC, employees and retirees likely would see their retirement benefits dramatically reduced.

Without a labor agreement, Delphi’s union workers would have little protection for the pensions they’ve counted on having in retirement, analysts say. And many workers say they feel they’ve been had.

“In 1999, when Delphi spun off from General Motors, all of our pension credits were transferred to Delphi,” said Gregg Shotwell, a worker who recently transferred back to GM from Delphi. “GM guaranteed those pensions, but that guarantee runs out this fall. As it stands now, I have about 27.5 years with Delphi.”

That’s frustrating for Shotwell and many of his fellow workers, because their many years at a solvent company—GM—don’t seem to count. They didn’t choose to be spun off, but, unlike workers who got to remain at GM, they don’t know whether their pensions will be there.

“They sort of want us to forget who our daddy is,” said Jeff Dockery, an Athens, Ala., Delphi worker. “But I know who my daddy is: It’s GM.”

Dockery and others expect GM to pay their pensions if Delphi backs out—even after October.

But Todd Jordan, a Delphi worker in Kokomo, Ind., is not convinced GM would pay if it doesn’t have to.

“The GM pension guarantee expires if it’s not triggered” by the fall, he said. After October, there’s not much workers can do, said Jordan, whose mother and 11 other family members rely on Delphi for their retirement income.

Workers agree with Gettelfinger that the union already has given too much.

The union allowed the auto supplier to hire a second tier of workers who earn less in wages and benefits than longtime Delphi workers—they don’t earn a fixed pension—and it helped Delphi get thousands more senior workers to take buyouts and early retirements. Workers believe those two moves combined leave them with little leverage to negotiate to keep their pensions, even with a strike.

“One of the most dangerous things that’s happened is allowing the creation of a two-tier wage, where you’ve got a new generation being discriminated against,” Shotwell said. “If they don’t have a pension, then they have no interest in protecting our pension.”

Bankruptcy lawyer Dan Weiner, cofounder of Bloomfield Hills law firm Schafer and Weiner, said there isn’t much workers could do. “It remains largely a wait-and-see scenario for workers,” Weiner said.

And Shotwell believes the threat of a strike is hollow.

“We can talk about how they might strike Delphi, but it’s preposterous,” he said. “When we had the old workers there, you could have a strike. Now you have people who aren’t making enough to be able to save any money.”

The position workers and retirees are in is infuriating, many said, particularly when a bankruptcy judge approved $37 million in bonuses last week for Delphi’s executives.

“I find it irresponsible that the people at the top are asking workers to take wage cuts and give more concessions even as they’re taking millions in bonuses,” said Larry Glaza Jr., a GM Pontiac worker.

UAW Vice President Cal Rapson called the latest Delphi offer pathetic. An offer made public last year would have cut wages over time to $16 an hour from about $28.

Harley Shaiken, a professor at the University of California at Berkeley who specializes in labor issues, said there are no guarantees for Delphi workers, but he doesn’t consider it likely Delphi would simply void workers’ pension benefits.

“Were it just Delphi, that would be one thing,” Shaiken said. “But you have the responsibility of GM.... GM may be rocky, but it’s not bankrupt. Allowing Delphi to void workers’ pension benefits would be extremely disruptive throughout the industry.”

It would be seen as setting a pattern for what companies could do, said General Baker, a retired Ford worker.

While Delphi workers and labor experts say there seems to be little they could do to protect their benefits, the threat of repercussions in contract negotiations with the automakers could be their saving grace.

Contracts with GM, Ford Motor Co. and the Chrysler Group expire in September.

Detroit Free Press, March 29, 2007