Delphi, GM, UAW enter memorandum of understanding on union employee treatment

By Caroline Salls

Pittsburgh, June 26 - Delphi Corp. entered into a memorandum of understanding with General Motors Corp. and the United Auto Workers that addresses treatment of UAW-represented Delphi employees, according to an 8-K filed with the Securities and Exchange Commission.

According to the filing, the treatment of UAW-represented employees by Delphi and GM will include a combination of flowback rights, retirement incentives, buy-downs, severance payments, changes to Delphi's 2004 supplemental UAW labor agreement and local negotiations.

The memorandum of understanding also deals with the commitment by GM to provide product programs and to facilitate employment opportunities at some Delphi facilities.

In addition, the memorandum of understanding sets the terms of a settlement between GM and Delphi of some claims asserted by the UAW against Delphi.

GM also agreed to extend its benefit guarantee agreement with the UAW, and Delphi agreed to extend its related indemnity agreement.

The memorandum of understanding is subject to UAW member ratification and approval of the U.S. Bankruptcy Court for the Southern District of New York.

GM said it does not expect any changes to previously reported estimates that its contingent exposure related to the Delphi bankruptcy will be roughly $7 billion.

Delphi, a Troy, Mich.-based automotive electronics manufacturer, filed for bankruptcy on Oct. 8, 2005. Its Chapter 11 case number is 05-44481.

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