Delphi Corp. on Friday backed down from its threat to ask the bankruptcy court to terminate its labor agreements, and agreed to extend the deadline for negotiations to March 30.

Delphi has been pressing its unions for deep wage and benefit cuts for its 34,000 hourly workers, so far without success. If Delphi unilaterally terminates its labor agreements in bankruptcy court, the UAW, which represents 25,000 of Delphi's workers, has threatened strike action. The catastrophic effect of such a strike on General Motors, Delphi's largest customer, plus GM's obligations to ex-GM employees in the Delphi workforce, have made GM an integral part of Delphi's negotiations with the unions. It seems likely that pressure from GM is behind Delphi's latest deadline extension.

According to Reuters, Delphi says the new deadline is "firm," while the previous deadlines have been "flexible."


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