Bankrupt auto parts supplier Delphi Corp. on Aug. 10 won a postponement to a court hearing on its petition to tear up its union contracts, to provide more time for negotiations. The court hearing was rescheduled for Aug. 17 after Delphi said it needed more time for talks with its main labor unions led by the United Auto Workers (UAW).
Delphi, GM's former parts subsidiary, filed for bankruptcy in October and has said a new labor agreement is critical to its ability to leave bankruptcy protection next year. The company, which remains GM's largest parts supplier, wants to void its union contracts and unilaterally impose salary and benefit cuts on its 34,000 workers. The UAW responded with a vote that overwhelmingly authorized a strike if the contract is thrown out. Any stoppage could be disastrous for GM.
GM has taken a $5.5 billion charge related to potential liabilities at its former subsidiary. It reached an agreement with Delphi and the UAW in March that offered redundancy to many Delphi employees and jobs to 5,000 others.
Fritz Henderson, GM's chief financial officer, said during an annual meeting with auto analysts this week that key aspects of GM's recovery plan were operating smoothly. "It's a fairly complicated endeavor. But (it's) extraordinarily important to find a solution that allows Delphi to emerge and be successful over time," he said.
General Motors expressed optimism about prospects for an out-of-court settlement.
Copyright Agence France-Presse, 2006