UAW Members Authorize Strike

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The New York Sun

DETROIT – Members of the United Auto Workers have voted in favor of authorizing a strike against Delphi if the auto parts maker moves on a plan to throw out labor contracts.

In a statement issued by the UAW yesterday afternoon, the union said members at 21 Delphi plants voted in favor of calling for a strike “should Delphi use its bankruptcy court proceedings to unilaterally impose changes to the UAW-Delphi collective bargaining agreements.” More than 95% of the votes cast authorized the UAW to call a strike, the UAW said.

While the authorization vote was expected to pass by an overwhelming margin, the news adds further heat to the ongoing struggle involving Delphi, its top union, and auto giant General Motors, which is Delphi’s top customer and former parent. If the UAW eventually stages a prolonged strike against Delphi, it likely would lead to costly production disruptions at GM.

Delphi filed for bankruptcy in October and uncertainty related to the impact of the proceedings on GM have weighed on the auto maker’s stock in recent months. Shares of GM, which is restructuring its automotive operations after posting a $10.6 billion loss last year, were down 1.1% at $25.92 in afternoon trading yesterday. The stock initially slipped 3% following the release of the vote results.

The president of Smith Asset Management,William Smith, said the result of the vote is “completely expected.” Mr. Smith, whose firm holds more than 60,000 shares in GM, said, “We consider this as part of the process versus being a negative.”

A Delphi spokesman, Lindsey Williams, said the vote results “don’t change anything in terms of our focus right now. We still remain focused on forging a consensual deal.”

A GM spokesman, Jerry Dubrowski, said the automaker “is still committed to achieving a consensual agreement with both Delphi and the unions and the vote results doesn’t change that commitment in any way.”

He said the vote does not speed the pace of talks or add more pressure on GM. He noted that ongoing court proceedings, including hearings on Delphi’s labor contract motion, play a role in dictating the pace of various elements of the negotiations, including Delphi’s strike authorization vote.

Last week, the chief executive of GM, Rick Wagoner, said GM is stockpiling parts that would help the automaker continue production if a strike were to last a matter of days. When asked if he was surprised by the UAW’s move to call for a strike vote, Mr. Wagoner said he wasn’t but added, “I hope they don’t have to activate it.”

“A broad-based strike for a prolonged period of time certainly doesn’t help us,” Mr. Wagoner said.

A strike is anything but guaranteed at this point. Bankruptcy judge Robert Drain is still considering whether to approve Delphi’s March 31 motion to have labor contracts thrown out. The bankruptcy court in New York handling Delphi’s case held meetings last week during which lawyers for the parts supplier and the UAW argued over the merits of the motion.

A ruling is expected by early to mid-June, but Judge Drain has urged the parties to hammer out an agreement on their own.

Outside of court, three-way talks among Delphi, GM, and the UAW continue to take place as the sides look to construct a bailout pact for Delphi, Mr. Wagoner said last week.


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