Delphi seeks court approval of employee buyout pact with GM, UAW; moves to protect Chapter 11 matters

By Caroline Salls

Pittsburgh, March 23 - Delphi Corp. requested court approval of its human capital hourly attrition program agreements with the United Auto Workers and General Motors Corp. that will allow eligible UAW-represented employees to retire with financial incentives through early retirement or a pre-retirement program and allow GM to create 5,000 job openings for Delphi's UAW-represented employees.

According to a Wednesday filing with the U.S. Bankruptcy Court for the Southern District of New York, Delphi also intends to offer comparable hourly attrition programs to other union-represented employee groups.

Delphi said implementation of the hourly attrition programs "will comprise the first cornerstone" in the restructuring of its U.S. operations.

The company said it would not have agreed to the employee buyout without a condition that the agreement does not prejudice any interested party, including Delphi and its official committee of unsecured creditors, in all other aspects of Delphi's Chapter 11 cases, including the positions of Delphi and GM in all commercial discussions and claims matters, all collective bargaining matters, in any pension termination proceeding and all claims administration and allowance matters.

As a result, Delphi also asked the court to approve this specific condition of the agreement and said if the court believes Delphi's ability to proceed with any of these matters would be impaired by the agreement, then it should not be approved.

As previously reported, under the terms of the agreement, Delphi will offer early retirement to 13,000 workers, with lump-sum payments of up to $35,000 as inducement to leave the company.

GM will fund those lump-sum payments and will also take up to an additional 5,000 Delphi workers, who will be allowed to "flow back", or transfer back to GM, which will assume some post-retirement benefits for those Delphi employees who go back to work for GM.

GM will meantime offer its own UAW-represented workers early retirement, with payouts of between $35,000 and $140,000, depending on an employee's length of service, as an inducement.

A hearing is scheduled for April 7.

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

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