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Delphi to Ask Court to Cancel Union Contracts

After unsuccessfully attempting to negotiate a wage decrease for its workers, the nation's leading auto-parts supplier indicated it may ask a court, today, to void its union contracts.

Delphi Corp. appeared poised Friday to ask a 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 Associated Press reported.

The nation's leading auto-parts supplier supplies General Motors and other automakers.

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 is still in talks with GM and its unions and had not set a deadline for those talks to end, Lindsey Williams, a spokesperson for Delphi told AP. 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 filed for bankruptcy protection in October and says it was saddled with uncompetitive labor agreements when it spun off from GM in 1999. According to an AP report, Delphi says it is now paying workers $75 an hour in wages and benefits.

Delphi's latest proposal reportedly 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 told AP there was no settlement as of Thursday afternoon, but that all three parties were still in negotiations.

Judge Robert Drain has scheduled a hearing on Delphi's request for May 9. If the Delphi contracts are voided by the court,, 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, according to AP.

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