Delphi, the largest U.S. auto supplier, is making progress in restructuring talks with GM and will delay an effort to reject its union contracts. The company, which filed for bankruptcy last month, was scheduled to ask a bankruptcy judge to void its union contracts on December 16. They are now pushing that back to January 20.
Almost 34,000 hourly workers at Delphi are represented by the United Auto Workers and other unions. GM share prices rose on hopes the negotiations will avert a strike that could mortally injure the crippled automaker, which is losing U.S. market share and has lost over $3 billion in the first three quarters of this year.
According to the UAW, the announcement is “a positive sign” but won’t restart stalled discussions with Delphi until the auto supplier retracts a proposal that would cut hourly workers’ wages by nearly 62 percent. GM has reported an agreement to temporarily forgo price cuts on some Delphi parts in order to give aid to the struggling supplier. Over $14 billion in parts were bought by GM from Delphi last year, or 16 percent of its total parts spending. GM has estimated its pays $2 billion more per year for parts from Delphi’s North American facilities than what it could pay on the global market.