Delphi Demands Draconian Wage Cuts

Delphi CEO Robert Miller, known as “Miller the Killer” for killing American jobs, wants Delphi workers to take huge pay cuts but included generous executive bonuses as part of Delphi’s bankruptcy restructuring plan.

Corporate America’s slash and burn campaign against its workers took an ugly turn this week when auto parts manufacturer Delphi Corp. delivered its latest proposal to the United Auto Workers (UAW) for wage cuts covering a majority of Delphi’s 34,000 hourly workers. Delphi filed for bankruptcy last October and has set this Thursday as a deadline for reaching agreements with former parent General Motors, the United Auto Workers (UAW) and other unions.

Delphi’s proposal would cut wages from the current $27 per hour to $22 immediately and then to $16 per hour by the end of 2007.

The demands come just a week after the UAW negotiated a special attrition program at GM and offers workers cash incentives between $35,000 and $140,000, depending on years of service. About 13,000 Delphi workers are eligible for payments and about 5,000 will be able to return to GM to work.

GM and its parts supplier Delphi once commanded more than 50 percent of U.S. auto sales and were the giants of U.S. manufacturing. GM’s market share has slipped to about 26 percent, forcing it and Delphi to slash North American jobs, citing high health care, wage and pension costs.

“This whole scheme is ‘Grand Theft Auto’ brought to you by Corporate America. It’s no accident that the countries who have grabbed market share from GM, Japan and the Europeans, have national health care systems and strict pension rules,” said IAM President Tom Buffenbarger. “Their wages are comparable to ours but they aren’t carrying the spiraling health care costs. We need a national health care system that takes medical costs off the bargaining table. And we need tougher pension rules to stop corporations from raiding pension funds and then claiming they can’t pay when workers retire.”

  

Hard Landing for Laid Off Workers

One year after United Airlines closed its state-of-the art Indianapolis Maintenance Center, left, in 2003, only a fraction of the laid off aircraft technicians were making what they had earned at United.

A new book by New York Times economics reporter Louis Uchitelle, takes a hard look at the widely accepted notion that retraining and re-education programs can provide laid off workers with comparable employment or similar wages.

“The Disposable American: Layoffs and Their Consequences” features the experiences of hundreds of United Airlines’ aircraft mechanics furloughed from the company’s Indianapolis Maintenance Center in 2003. Led by insurgents from the Aircraft Mechanic and Fraternal Association (AMFA), the mechanics embarked on a slowdown, decertified from the IAM and ultimately went from career jobs that paid $31 an hour with benefits and pensions, to jobs paying as little as $10 an hour.

The former mechanics also came face to face with the hard realities of federally subsidized worker retraining programs. By the spring of 2004, only 185 of 800 former mechanics who went through such a program were working again. “Despite their skill, 33 of those 185, or 18 percent were earning less than $13.25 an hour working in warehouses, on construction jobs, in restaurants or in retailing,” writes Uchitelle. “Only 15 of the re-employed mechanics had regained their United wage level or exceeded it.”

A national survey by the Bureau of Labor Statistics confirms the loss of wages following layoffs. Two years after a layoff, two-thirds of the victims say they are working again, but only 40 percent report they are making anywhere near what they did in their old jobs.

 

Northwest Airlines Back in Court

The bankruptcy judge overseeing Northwest Airlines’ financial affairs will hold a scheduling conference in New York on March 29 with company and union officials following the rejection of Northwest's proposal by the ESSC and SIMOP groups.

It is expected that the judge will set a date for the continuation of the Section 1113(c) trial which could lead to abrogation of any labor agreement not modified by a replacement accord.

In separate voting by classification, Northwest’s proposal was accepted by the 7,677-member Clerical, Office, Fleet and Passenger Service (COFPS) group and the 18-member Plant Protection (PP) group. A similar proposal was rejected by the 5,632-member Equipment Service and Stock Clerks (ESSC) and the 42-member Flight Simulator Technicians and Simulator Support Specialists (SIMOP).

While two agreements were ratified and two were rejected, the company’s financial situation remains critical. Following the vote, Northwest reported a $1.2 billion fourth quarter net loss, bringing the full year loss for 2005 to a staggering $2.6 billion.

 

Ft. Benning Workers Vote to Join IAM

Nearly 230 workers employed by ITT, a subcontractor at Fort Benning, GA, recently voted to be represented by the Columbus Metal Trades Council. Approximately 80 employees who perform small arms repair will become members of IAM Local 2699. Other members of the unit will join the Sheet Metal Workers (SMWIA), Operating Engineers, and the International Brotherhood of Electrical Workers (IBEW).

Business Representative Alan Williams credited Local 2699 Secretary-Treasurer Clint Allen with making the organizing effort a success. “Clint's hard work helped assure a victory in this joint effort,” said Southern Territory GVP Bob Martinez, who praised the solid working relationship between the IAM and the Metal Trades Department of the AFL-CIO.

 

Michigan Gov Boosts Minimum Wage

Michigan Gov. Jennifer Granholm signed legislation today to increase Michigan’s minimum wage from $5.15 an hour to $6.95 an hour starting in October. The legislation calls for the minimum wage to increase further to $7.15 in July 2007 and to $7.40 in July 2008.

The substantial increase in Michigan’s minimum wage is a victory for working families and a clear sign of the power state governors have to impact the lives of American families.

Although seventeen states and the District of Columbia have minimum wages higher than the federal minimum wage, the Bush administration continues to reject appeals to boost the national minimum wage. The drive to boost Michigan’s minimum wage was led by a coalition of labor unions, the Michigan Democratic Party and other advocacy groups.

 

Gas Prices on the Rise

Gas prices have jumped 15 cents to nearly $2.50 a gallon in the past two weeks, according to the nationwide Lundberg survey. The average price for a gallon of gasoline is 40 cents more than it was a year ago.

As corporations such as Exxon continue to see record profits, analysts are expecting motorists to see gas prices increasing and possibly approaching $3 a gallon in the coming months.

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