DETROIT -- Twenty-one locals of the United Auto Workers union voted overwhelmingly to authorize a strike should Delphi Corp. unilaterally impose changes to its labor agreements. More than 95 percent of the votes cast authorized the UAW to call a strike.
The union's vote is a response to the auto supplier's request in court last week to nullify labor contracts and eliminate retiree medical and life insurance benefits.
The approval was expected, but does not mean a strike is certain. Both sides are awaiting U.S. Bankruptcy Judge Robert Drain's decision, which is not expected until June, at the earliest.
Delphi lost $4.8 billion in 2004. After losing $741 million in the first six months of 2005, it filed for Chapter 11 bankruptcy protection on Oct. 8. Delphi says it no longer can afford to pay its 33,000 hourly workers - including 23,000 UAW members - what it once promised, which averages $78 an hour including wages and benefits.
Permission to cancel contracts will give Delphi the authority to cut wages at will.
With $900 million in its strike fund, the UAW could afford a strike of significant length. The union currently offers members $200 for a full week on strike, or $40 a day for less than a full week. Striking workers also would receive UAW health insurance that would start when Delphi cuts those benefits.
Last week, Drain urged the sides to keep negotiating and said thousands of people would be hurt by their failure to do so.
"I would strongly urge you all to continue talking," Drain said during Friday's bankruptcy hearings in New York. "I don't think you want to look in the eye of all the people that are affected by this and tell them that you failed."
A strike would be costly to General Motors Corp.; Delphi is GM's largest supplier. In 1996, workers in Dayton, Ohio, went on strike against Delphi, costing GM $900 million and shutting down 26 of its 29 North American assembly plants.
A Delphi strike also would increase GM's chances of filing for bankruptcy. GM employs roughly 142,000 in the United States and spends $85 billion annually on parts and services from more than 3,000 suppliers.
The last major UAW strike in the auto industry was at two GM parts plants in Flint, Mich., in 1998. The 48-day strike, at what was later known as Delphi Flint East and a 54-day strike at Flint Metal Center, virtually shut down GM across North America for much of that June and July.
That cost GM $2.2 billion and shut down 27 plants. GM's U.S. sales and market share dropped, and the shutdown shaved about 0.5 percent off the nation's gross domestic product in the 1998 third quarter.
During the 1998 strike, nearly 200,000 GM workers went without pay for up to eight weeks.