Latest UAW proposal could hold the key to Delphi's restructuring

The UAW is walking a few tightropes right now, and it can't afford to fall off of any of them. In talks with bankrupt auto supplier Delphi Corp. and its private equity partners, at stake for the UAW is coming to an agreement that benefits both sides, but one that does not put the UAW at a disadvantage when it comes to negotiating new labor agreements with other automakers this summer.

Delphi had given the UAW two different proposals, neither of which the UAW felt it could take to its membership. The UAW's counterproposal on wages and benefits was only ten pages long, but is so complicated that it will take a while yet for Delphi to really sort out what it really means. Coming to an agreement with the UAW is essential for Delphi to emerge from bankruptcy as a recapitalized company. However, the UAW knows that if it gives any more concessions to Delphi, the big three automakers will want the same thing during their contact talks this summer. With the Delphi situation also involving legacy issues for GM, Cerberus exiting the deal and other private equity companies having to restructure, and the UAW needing to get its next move right, it is a thick plot for all involved.

[Source: Detroit News]