Delphi CEO seems to relish UAW fight

Struggling auto parts company may face a strike if it moves to void union contracts

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November 24, 2005|By NEW YORK TIMES NEWS SERVICE

DETROIT -- Robert S. Miller started off as the Oracle of Delphi, handing down dire pronouncements about the auto industry from his lofty post as chief executive of the parts supplier.

But with the Delphi Corp. now in bankruptcy proceedings, Miller, known as Steve, has come charging down from the mountaintop to confront Delphi's unions in a way that Detroit has rarely seen.

Miller seems to be relishing his combatant's role, at least for the attention it is bringing to the crisis facing his industry.

"Somebody had to do this," Miller said in an interview last weekend. "If I have ended up where I am the one who has to be a leader for change, I'll keep talking."

He is doing plenty of that. Next month, Delphi is expected to ask a federal bankruptcy judge for permission to terminate contracts paying $64 an hour in wages and benefits combined, so that it can impose sharply lower rates. Otherwise, says Miller, a veteran turnaround expert who took over as chairman and chief executive of Delphi in July, all of Delphi's 34,000 hourly jobs in the United States are at risk.

He is confident - some might say overconfident - of victory. A ruling in Delphi's favor is "a slam dunk, given the financial condition of the company," Miller said.

Such comments are ruffling feathers in a city where the fashion has been to stress cooperation, even as plants are shut and jobs are cut.

"His demands are so extreme, and he insists on them, time after time after time," said Douglas A. Fraser, a former president of the United Automobile Workers union. "It contradicts the approach that almost every leader of every industry uses."

Miller's tough talk could send workers on a charge themselves - out to picket lines, crippling production not only at Delphi, the nation's biggest auto parts company, but at General Motors Corp., its biggest customer and the nation's No. 1 auto company.

If that happens, Delphi has no secret plan to operate with replacement workers as Northwest Airlines did when members of its mechanics union walked off in August. Nor does Miller expect to send production to plants outside the United States, so it can keep supplying GM.

The reason, he said, is that "I am not expecting a strike, so there is no contingency plan."

Many union members are livid at an executive compensation package with hefty bonuses, which Miller contends are needed to keep top managers from leaving. The union sees them as an insult when Delphi is insisting that workers give up two-thirds of their pay and benefits.

Miller expresses sympathy for workers' personal situations. But he said it was time that someone pointed out that they were making much more than their counterparts in other parts plants. Last week, Delphi sent journalists a multicolored chart, drafted from government statistics, depicting the lower wage rates in different parts of the United States.

"There is a certain degree of denial here," Miller said. "It is very difficult to be the bearer of bad news. But the only way to find the answers is to first understand the problem."

One answer could come through the bankruptcy process.

If there is no agreement with unions by Dec. 16 - an unlikely prospect, UAW President Ron Gettelfinger said last week - Delphi will move in bankruptcy court to set aside its union contracts.

Arguments on the request would be heard in late January, with a ruling expected in February, barring a deal between the two sides. If a judge rules in Delphi's favor, it can terminate its contracts and impose lower terms.

Miller said that would not happen automatically, but he also said he did not think unions would let the situation reach that point. Instead, he said he expected the move to spur negotiations and lead to an agreement.

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