Bankrupt Tier-1 Delphi is expected to ask a federal judge to nullify its union contracts on Friday, despite efforts between the supplier, General Motors and the United Auto Workers to restructure worker pay rates. If the contracts are voided, an eventual walkout of Delphi’s 34,000 workers is widely expected—a move that could well sound the death rattle for GM’s efforts to stave off bankruptcy.

Delphi had set today as a deadline for an agreement, but the UAW and GM haven’t been able to come to terms on wage proposals as of late Thursday afternoon. Talks with GM and union reps are ongoing, and there remains the possibility of (yet another) delay in the filing motions. Should Delphi take such a course, it would be the fourth time the deadline has been pushed back.

A hearing has been scheduled at Delphi’s request for Tuesday, May 9 and Judge Robert Drain has indicated that he won’t decide if he’ll void the contracts until after that day.  However, the International Union of Electronics Workers-Communications Workers of America (around 8k Delphi employees) has already green-lighted a strike, and it is likely that the UAW would do so as well.

[Source: Associated Press via Forbes]

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