Delphi, GM, UAW employee memorandum of understanding approved

By Caroline Salls

Pittsburgh, July 19 - Delphi Corp. obtained court approval of its memorandum of understanding with General Motors Corp. and the United Auto Workers that addresses treatment of UAW-represented Delphi employees, according to a Thursday filing with the U.S. Bankruptcy Court for the Southern District of New York.

According to the filing, the settlement agreement gives the UAW a $140 million pre-bankruptcy unsecured claim against Delphi.

In addition, Delphi must pay $993,000 in severance and vacation payments to former UAW-represented hourly employees of former Delphi supplier Manufacturers Products Co.

As previously reported, 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.

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 also subject to UAW member ratification.

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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