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Boo! Corporation doesn't want to honor its contract to workers.

Old 03-31-06, 08:19 AM
  #1  
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Boo! Corporation doesn't want to honor its contract to workers.

There's no point in having contracts if people don't honor them.

http://news.yahoo.com/s/ap/20060331/.../delphi_unions

Delphi to Ask Judge to Cancel Union Deals

By DEE-ANN DURBIN, AP Auto Writer 1 hour, 1 minute ago

DETROIT - Delphi Corp., the nation's leading auto-parts supplier, appeared poised Friday to ask a bankruptcy judge to cancel its union contracts, after months of unsuccessfully trying to negotiate a wage decrease for its 34,000 U.S. hourly workers.

The move would send shudders through an already ailing U.S. auto industry, particularly General Motors Corp. and other automakers who rely on the Troy, Mich.-based supplier.

Delphi had set a deadline of Thursday to reach an agreement to lower wages for its blue-collar workers. There was no word early Friday that the United Auto Workers and GM had agreed to Delphi's latest wage proposal.

In a message on its Web site Thursday, the UAW said Delphi would file motions to void its contracts Friday morning. Delphi spokesman Lindsey Williams said the company would not comment on that posting. The case is in federal bankruptcy court in New York.


Delphi also is expected to close many of its U.S. plants as part of its reorganization. In November, union officials said that Delphi planned to cut its production work force about 10,000 over about three years.

Delphi was still in talks with GM and its unions as of Thursday afternoon and had not set a deadline for those talks to end, Williams said. On three other occasions, Delphi has delayed filing motions to cancel its contracts to continue negotiating with GM and its unions. The company has the option of delaying again.

Delphi says that wage cuts are a necessary part of its restructuring. The company, which filed for bankruptcy protection in October, says it was saddled with uncompetitive labor agreements when it spun off from GM in 1999. Delphi says it is now paying workers $75 an hour in wages and benefits.

But the UAW, which represents the vast majority of Delphi's hourly workers, reacted angrily this week to Delphi's latest proposal, which called for lowering production workers' wages from $27 an hour to $16.50 an hour in 2007. Skilled workers' wages would fall from $30 an hour to $24. Local union leaders have said the UAW would not take the deal to its members for a required vote.

GM's cooperation in a settlement also is key, since Delphi would depend on GM, its former parent and largest customer, to supplement its wage offer and pay for one-time, $50,000 bonuses to union members. If GM does not agree to supplement workers' pay, there would be no bonuses and base wages would fall to $12.50 an hour, or $21.50 for skilled workers, according to the UAW.

GM spokesman Jerry Dubrowski said there was no settlement as of Thursday afternoon, but that all three parties were still in negotiations.

If Delphi asks the bankruptcy court judge to void its contracts, the company would not immediately face organized strikes. Judge Robert Drain has scheduled a hearing on Delphi's request for May 9 and would not decide whether to void Delphi's contracts until after that hearing.

But if Drain does agree to void Delphi's contracts, the International Union of Electronics Workers-Communications Workers of America which represents around 8,000 Delphi workers has already authorized a strike, and UAW members could authorize one as well.

A strike would be devastating for GM, which depends heavily on Delphi parts. GM, which is struggling with declining U.S. market share and spiraling costs, lost $10.6 billion in 2005 and is in the midst of its own restructuring. A strike would hurt other companies and smaller suppliers, also. Delphi supplies every major automaker, including Ford Motor Co. and Nissan Motor Co.

Delphi would not be the first U.S. auto supplier to ask a judge to cancel its union contracts this year. Tower Automotive Inc. asked a judge to cancel its union contracts in late February after failing to agree on lower wages. The judge in that case has put off a decision to allow Tower to continue negotiating with its unions, which also have threatened to strike.

Delphi, GM and the UAW did agree last week to a buyout offer for about 17,000 U.S. hourly workers. Under that agreement, workers will be eligible for a lump sum payment of $35,000 to retire. Also, up to 5,000 Delphi workers will be eligible to return to GM.

GM shares fell $1.09, or 4.9 percent, to close at $21.06 on the New York Stock Exchange. Delphi shares are no longer trading on the NYSE.
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Old 03-31-06, 11:07 AM
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Shouldn't have signed the contract to begin with, but if the alternative is to go under, what can you do?
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Old 03-31-06, 11:09 AM
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Honor the contract.

Of course they run to the corporation friendly bankruptcy court to get relief.

Chapter XI should be done away with. That should have been the first thing in the so-called bankrupticy reform bill.
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Old 03-31-06, 11:15 AM
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Originally Posted by kvrdave
Shouldn't have signed the contract to begin with, but if the alternative is to go under, what can you do?
Honor the contract. But if they are going to cheeze out of it, then all corporate officers should relinquish their golden parachutes too. Oh wait... execs earn their pay, union workers are goldbricks... I forgot about that.
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Old 03-31-06, 11:34 AM
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Damn, you guys just read what you want and believe what you want about other people.

Let them go under. What the hell do I care?
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Old 03-31-06, 11:40 AM
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Originally Posted by kvrdave
Damn, you guys just read what you want and believe what you want about other people.

Let them go under. What the hell do I care?
I agree. If unskilled factory workers who currently make more than most college educated professionals would rather lose their job then take a pay cut - so be it.

Gotta love unions...
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Old 03-31-06, 11:46 AM
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Yeah, and you gotta love corporations that through rotten management decisions an d management total ineptness (and of course those exhoribant corporate salaries) are not required to honor contracts.

Take you union bashing somewhere else.
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Old 03-31-06, 12:01 PM
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Originally Posted by classicman2
Yeah, and you gotta love corporations that through rotten management decisions an d management total ineptness (and of course those exhoribant corporate salaries) are not required to honor contracts.

Take you union bashing somewhere else.
I am not familiar with any rotten management decisions that Delphi has made, but perhaps you are. And regardless of company decisions, I don't see how any company can compete if they have to pay such inflated salaries to their workers. What happened to fair compensation? I am not bashing unions - just saying I don't feel sorry for them if they lose their job since that is basically the only option they are offering to Delphi.
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Old 03-31-06, 12:05 PM
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Originally Posted by cpgator
I agree. If unskilled factory workers who currently make more than most college educated professionals would rather lose their job then take a pay cut - so be it.

Gotta love unions...
But the UAW, which represents the vast majority of Delphi's hourly workers, reacted angrily this week to Delphi's latest proposal, which called for lowering production workers' wages from $27 an hour to $16.50 an hour in 2007. Skilled workers' wages would fall from $30 an hour to $24. Local union leaders have said the UAW would not take the deal to its members for a required vote.
How much do you make, cpgator? That's a 40 percent decrease in pay -- and a 20 percent drop for skilled workers. Would you be OK with your salary being cut almost in half?

And why lay off workers and plead for mercy in bankrupcy court when you're also trying to increase benefits and bonuses for your executives?
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Old 03-31-06, 12:23 PM
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are these bonuses in cash or stock options? One reason these are given out is that in situations like this many white collar employees want to start looking for new work with pay and stock options. Especially managers. if you don't pay a nice bonus, most managers will leave the company for other work.
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Old 03-31-06, 12:41 PM
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Originally Posted by NCMojo
How much do you make, cpgator? That's a 40 percent decrease in pay -- and a 20 percent drop for skilled workers. Would you be OK with your salary being cut almost in half?

And why lay off workers and plead for mercy in bankrupcy court when you're also trying to increase benefits and bonuses for your executives?
Of course I wouldn't want my pay cut in half, because then I would be very underpaid for my job. I also know that I could go to basically any company and get paid about the same or more for my position. How many places could an unskilled factory worker go and make $27 an hour?

Exec bonuses are usually always offered when a company is in this situation - otherwise the execs will jump ship. I do agree that exec pay for many companies is too high, but I don't see that as a reason why these union companies are having a hard time competing.
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Old 03-31-06, 12:50 PM
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Originally Posted by kvrdave
Damn, you guys just read what you want and believe what you want about other people.
Sure, doesn't everybody?

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Old 03-31-06, 12:50 PM
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After the dot-com crash a lot of skilled people would have been happy to take 40% pay cuts if they could have even found jobs. They weren't fortunate enough to have had a choice though.
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Old 03-31-06, 12:55 PM
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Originally Posted by cpgator
Of course I wouldn't want my pay cut in half, because then I would be very underpaid for my job. I also know that I could go to basically any company and get paid about the same or more for my position. How many places could an unskilled factory worker go and make $27 an hour?

Exec bonuses are usually always offered when a company is in this situation - otherwise the execs will jump ship. I do agree that exec pay for many companies is too high, but I don't see that as a reason why these union companies are having a hard time competing.
Really?!

Oftentimes, exec compensation packages aren't tied to the health of the corporation, but linked to some specific metric... like stock prices. Execs then make decisions for the company that will maximize their compensation. That has a direct effect on the company.

Do you think that unions simply get everything they demand and management has no say? If that is true, then why does a company that employs union workers need high-priced management?
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Old 03-31-06, 01:01 PM
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I wonder how many members on this forum who defend corporations & their practices defended Enron? I would imagine quite a few. I also doubt that they're willing to come forward with their defense.
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Old 03-31-06, 01:15 PM
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Originally Posted by NCMojo
How much do you make, cpgator? That's a 40 percent decrease in pay -- and a 20 percent drop for skilled workers. Would you be OK with your salary being cut almost in half?
You're leaving out what would happen if GM signed off on the deal...

GM's cooperation in a settlement also is key, since Delphi would depend on GM, its former parent and largest customer, to supplement its wage offer and pay for one-time, $50,000 bonuses to union members.
If my company said they were going to give me a $50,000 bonus so they could cut my salary by 40%, I'd consider it one of the best things that ever happened to me. It'd be like winning the lottery. Who in their right mind wouldn't take the deal and then start looking for a job that would pay comparable to what they'd already been making? Oh yeah, someone with low to no marketable skills and a grossly over-inflated salary. Hell, even for those in that boat, wouldn't $50k pay for a year or two of trade school so they could actually deserve a higher salary?

I'm not necessarily saying Delphi should be let out of their contractual obligations, but given the info in that article, it's seems silly to claim they're not at least trying to find an outcome that's fair to all involved parties.
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Old 03-31-06, 01:56 PM
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Originally Posted by cpgator
I don't see how any company can compete if they have to pay such inflated salaries to their workers.
Maybe Delphi should have thought about that before it agreed to pay "such inflated salaries" to its workers.
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Old 03-31-06, 01:58 PM
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Have you notice how much you hear the phrase 'we have to do this to compete' is used by corporations and many others also?
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Old 03-31-06, 01:59 PM
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Originally Posted by JasonF
Maybe Delphi should have thought about that before it agreed to pay "such inflated salaries" to its workers.

I agree. But now what?
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Old 03-31-06, 02:00 PM
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Originally Posted by classicman2
Have you notice how much you hear the phrase 'we have to do this to compete' is used by corporations and many others also?
I think that is because this isn't a government job. Did you ever hear anything like that when you worked for Social Security? Probably not, but then you didn't actually have to compete.
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Old 03-31-06, 02:03 PM
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Originally Posted by kvrdave
I think that is because this isn't a government job. Did you ever hear anything like that when you worked for Social Security? Probably not, but then you didn't actually have to compete.
Before you begin your rant against the Social Security Administration - you might want to check it's administrative cost.
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Old 03-31-06, 02:06 PM
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Originally Posted by kvrdave
I agree. But now what?
Sneak into Starfleet headquarters and reprogram the computer so that there's a solution.

Or, barring that, stop bashing unions for things that are management's fault.

Speaking of unions, I hear prosecutors have filed charges against Wojciech Jaruzelski in connection with his actions in 1981. Say ... I wonder why nobody on the right ever goes after that particular union.
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Old 03-31-06, 02:47 PM
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Originally Posted by classicman2
I wonder how many members on this forum who defend corporations & their practices defended Enron? I would imagine quite a few. I also doubt that they're willing to come forward with their defense.
I would guess none. But then, you can always point to those legions of defenders who who are not willing to come forward with their defenses. Now, we just have to smoke 'em out.

Do you understand the difference between business practices that you (or I) may find harsh but that do not violate anyone's rights and fraud? I think you do but you hide it well.

BTW, if your whole post is a joke, the winkie doesn't exonerate it.
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Old 03-31-06, 02:52 PM
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Originally Posted by JasonF
Or, barring that, stop bashing unions for things that are management's fault.
That really has nothing to do with what Dave was asking. I'm in the same boat as him in wondering what your solution to the problem would be. Let's say the unions continue to refuse a compromise. Do we, out of principle, want to force Delphi out of business entirely and risk losing those jobs to overseas competition?

Other than that, blaming management for agreeing to high wages is a little silly when the choice is pay them or have your workforce walk. Unions wield their power to ensure that their members get paid as much as possible for as little work as possible. In this regard, they must bear a portion of the blame for impediments to productivity that make it difficult for US manufacturing to compete with China or other foreign competition.
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Old 03-31-06, 02:54 PM
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Originally Posted by JasonF
Maybe Delphi should have thought about that before it agreed to pay "such inflated salaries" to its workers.
I'm with you. Either they get the union to voluntarily accept changes or goodbye Charlie. They should not get out of it in bankruptcy court.

Sometimes people make bad decisions and bad contracts. Corporations should not get a free pass out of those contracts any more than anyone else.

Everything doesn't have a happy ending.
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