Delphi shareholders appeal employee buyout program approval

By Caroline Salls

Pittsburgh, June 1 - Delphi Corp. shareholders Appaloosa Management, LP, Wexford Capital LLC and Lampe Conway & Co. LLC appealed the court approval of the company's human capital hourly attrition program agreements with the United Auto Workers and General Motors Corp., according to a Wednesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

As previously reported, the program allows 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.

Delphi also intends to offer comparable hourly attrition programs to other union-represented employee groups.

In its motion for approval of the program, Delphi said implementation of the hourly attrition programs "will comprise the first cornerstone" in the restructuring of its U.S. operations.

Under 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.

According to the order, the court added a provision that directs Delphi to establish a $75 million segregated bank account to reimburse the company for gross weekly wage payments for employees who elect to participate in a pre-retirement program.

Indenture trustee Wilmington Trust Co. has also previously appealed the buyout program approval.

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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