Delphi, Union Agree to Buyout Plan

Trying to reduce costs, the bankrupt auto parts supplier cuts a deal with its second-largest union.

Author:: TSC Staff
Publish date:: Jun 17, 2006 11:47 AM EDT

Trying to reduce costs, the bankrupt auto parts supplier cuts a deal with its second-largest union.

Delphi (DPHIQ.PK) has agreed on a buyout plan with its second-largest union, according to a media report.

The auto parts supplier, which has been operating under Chapter 11 bankruptcy protection since October, announced the agreement with the International Union of Electronic Workers-Communications Workers of America and

General Motors

(GM) - Get Report

, Delphi¿s former parent and biggest customer, the

Associated Press

reported.

A week ago, Delphi, which is struggling to cut costs through employee reductions, announced a similar buyout package with its largest union, the United Auto Workers union.

GM has agreed to provide financial support under the IUE-CWA plan, which would have to receive bankruptcy court approval, according the

About 8,000 hourly workers represented by the union will be eligible. They may opt for buyout packages ranging from $40,000 to $140,000. Some will be be offered a lump sum of $35,000 to retire. The plan also will allow as many as 3,200 Delphi employees to receive retirement benefits from GM.

Delphi shares finished the week at $1.73. GM stock rose a penny Friday to $25.60.