Posted on 10/16/2005 9:02:20 PM PDT by Born Conservative
DETROIT — The United Auto Workers , outraged over handsome severance packages proposed for 21 Delphi Corp. executives, some of whom receive upward of $1 million a year, said Friday it will file a complaint with the bankruptcy court against the auto-parts supplier. "It’s disgusting," said UAW spokesman Paul Krell of the severance packages. Five of the top 21 executives receive between $800,000 and $1 million a year. Delphi Chief Executive Officer Steve Miller would not be covered by the severance proposal.
Krell said the UAW’s attorney will file a complaint protesting the auto supplier’s Key Employee Compensation Program with New York bankruptcy Judge Robert Drain in the coming weeks. Miller has said the compensation program is essential to keep valuable executives from leaving.
The proposed severance agreement — which provides compensation in the event Delphi terminates the officer’s employment without cause or if the officer quits for good reason — includes 18 months of salary and 18 months of bonuses. Currently all qualifying salaried employees receive severance pay for 12 months after leaving the company.
Delphi executives must agree to a noncompete agreement to accept the severance package, which is designed to keep them from leaving for a competitor.
"The day I got here I began to worry about keeping my management group intact," Miller told reporters Wednesday. "It is disruptive and expensive to recruit replacements. There is no question they could get better compensation elsewhere, and I know for a fact that headhunters are swarming.
"Most adults fully understand that we have to be competitive to retain leadership if we are going to have the company survive bankruptcy."
UAW officials were not sympathetic to Miller’s concerns of fleeting executives.
"Once again, we see the disgusting spectacle of the people at the top taking care of themselves at the same time they are demanding extraordinary sacrifices from their hourly workers," said UAW President Ron Gettelfinger and UAW Vice President Richard Shoemaker in a written statement just after news of the severance packages broke last week.
Delphi said it was not concerned about the expected UAW filing.
"The UAW is well within their right to file a complaint, if that’s what they want to do," said Lindsey Williams, a Delphi spokesman.
Meanwhile, Delphi, which employs 14,700 people in Michigan and 50,000 worldwide, is seeking wage cuts of as much as 63 percent for an estimated 33,000 U.S. hourly workers, either through voluntary union acceptance or through force of a bankruptcy court mandate. The UAW represents 25,000 of those workers, who would go from making an estimated $27 an hour to $10 an hour.
The Troy, Mich.-based auto supplier filed for Chapter 11 bankruptcy protection a week ago after its efforts to win concessions from its labor unions and a multibillion-dollar bailout from former owner General Motors Corp. failed.
The Chapter 11 filing gives Delphi — which lost $4.8 billion last year and $741 million through the first six months this year — relief from its creditors while it develops a plan that will include closing plants and imposing lower wages and benefits on workers. Delphi expects to emerge from bankruptcy in 2007.
The next stop in Delphi’s trip through bankruptcy court occurs Monday when a U.S. trustee selects a committee of unsecured creditors. This committee works to consult with Delphi’s executives, investigate the company’s problems and negotiate a plan of reorganization.
Krell said the UAW will be there to ensure the union’s interests are protected, though it cannot by law obtain a seat on the committee.
They both deserve each other.
"New York bankruptcy Judge Robert Drain"
That is a great name for a bankruptcy judge, it's like something out of Dickens!
Being granted a bankruptcy allows a person or a corporation to escape certain financial and contractual obligations. If the bankruptcy would allow Delphi to negate certain obligations to its hourly employees, then the severance packages for salaried employees should be looked at as well.
Giving executives a ton of money and the workers peanuts is disgusting.
Bankruptcy judges pay attention to management and the creditors (usually a committee) rarely to unions.
The UAW won't be happy until they drive the big three as well as Caterpillar out of business. It's a funny thing, these people trying to bankrupt the people who feed them.
Agreed, but if the union has an agreement that the company is seeking to breach, the union WILL have input.
Won't these guys collect more in unemployent compensation than what Delphi is offering in pay? A single guy could squeeze by on $20K, but a family? Forget it.
Guess Delphi will imitate Tyson's chicken and hire a lot of illegal aliens.
The "executives" get the money only if they are laid off and even then they aren't allowed to work for a competitor for 18 months.
Take it as a sign that they actually don't intend to lay off managers and are serious about emerging from bankruptcy.
So, if part of the reorganization is a change in the collective bargaining agreement, then the judge will allow no input from the union.
I'm no friend of the UAW (I work in automotive and write this from Korea, where the UAW has forced us to move manufacturing jobs), but it seems awfully lopsided.
Our biggest problem in automotive is not the current wage rates, because those can be bargained (or moved). It's the current benefit agreements with retirees and such.
If those guys on the line had gone to College and learned something, instead of spending all of their time at the Bowling Alley, and Eagles, they might be included in the golden parachute.
Not really
I went to college. I got my MBA.
Believe me, I'm nowhere near "Golden Parachute" territory, and neither are 99% of all salaried employees or college graduates.
I wish that it worked that way ;) Unfortunately, there is, indeed, a significant amount of "cronyism" in even public companies. Operating Officers routinely lease land from friends and purchase materials and services from family members.
Again, though, if GM has contractual obligations with the employees or retirees, and those obligations would be modified or severed under a bankruptcy ruling, then generous payouts to the senior officers should also be reconsidered (if possible).
I agree that creditors are and should be given a significant priority over other considerations, but allowing one group to walk away untouched seems ridiculous.
The hit management usually takes is stock related.
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