Auto parts won’t pay the same

Jill Barshay Jun 21, 2007
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Auto parts won’t pay the same

Jill Barshay Jun 21, 2007
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Bob Moon: General Motors and its spin-off parts supplier Delphi are said to be very close to reaching a deal on a new labor contract with the United Auto Workers. They’ve been working around the clock to come to terms before the week is out, and it’s being reported that the largest U.S. auto parts maker may get its wish to slash wages by half. Marketplace’s Jill Barshay reports.

Jill Barshay: Delphi has to compete against low-cost auto parts suppliers in China and Canada. It wants to cut the wages of its longtime workers by half, to as little as $14 an hour.

Gary Chaison is a professor of labor relations at Clark University. He predicts workers will vote to accept the pay cut.

Gary Chaison: They do not see any good options on the table right now. The idea that they can continue as a high-wage auto parts producer, I don’t think that’s reality any more in the mind of the Delphi workers.

General Motors has a big stake in this game. GM spun off Delphi in 1999, but GM is still responsible for at least $7 billion of Delphi’s retiree costs.

Delphi still supplies many of the parts used in GM vehicles. GM wants Delphi out of bankruptcy as soon as possible. Delphi workers could ratify a deal as early as this month.

In New York, I’m Jill Barshay for Marketplace.

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