Delphi Looking for Health and Pension Benefit Freeze

October 26, 2005 ( - The United Auto Workers (UAW) warned Tuesday that bankrupt Delphi Corp. wants to freeze its union pension and eliminate retiree health care and other benefits.

According to a Delphi proposal submitted to UAW leaders in Indiana, Delphi may ultimately be forced to terminate the pension plan, Reuters reported. The proposal was posted on the Web site maintained by UAW Local 292 in Kokomo, Indiana,

“Delphi recognizes the hardship that this proposal imposes on your membership,” the company document said. “There is no alternative. Unless Delphi can transform its US operations, they will cease to exist, resulting in even greater hardship for employees, retirees and their families.”

Delphi, which filed the largest bankruptcy in US automotive history earlier in October, last week gave proposals to its major unions to redo labor contracts and cut wages and benefits it insisted were smothering its US operations.

The company proposes to cut base pay to as low as $9.50 per hour, from about $27.50 per hour, increase contributions for health care, and eliminate dental and vision coverage. It wants the contract to run from January 1, 2006 to January 2012.

“Delphi’s proposal is designed to hasten the dismantling of America’s middle class by importing Third World wages to the United States,” UAW President Ron Gettelfinger and Vice President Richard Shoemaker charged in a statement.

Delphi has more than 50,000 US employees, including 34,750 hourly workers, most represented by unions.

Delphi has said it wants to negotiate deals with its unions out of court, but plans to file court papers in mid December to reject the contracts and eliminate retiree medical and life insurance benefits if agreements are not reached by then.