Rather than cancelling labor contracts on its own with court permission, Delphi Corp. filed yesterday with the federal bankruptcy court, saying that the court can terminate its contracts if the supplier and the union can't come to terms on a new agreement. Analysts suggest that this makes a strike likely for the auto supplier. Delphi originally asked that it be able to void the contracts on its own (rather than allowing the judge to do so) because execs wanted to try to work it out with the union first. Judge Robert Drain has ten days to cancel the contracts.

The union argues that wage cuts aren't necessary, but Delphi states that it plans to lose $2 billion this year and $5 billion by the end of the decade unless something is done about expenditures.

To add insult to injury, the supplier wasn't able to come to an agreement with General Motors over parts pricing, so it will still sell parts to the automaker for less than it had planned.

[Source: The Chicago Tribune]


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