UPDATE 1-UAW rejects latest Delphi contract offer


(Recasts throughout, adds details, quotes, byline; changes dateline, previously CHICAGO)

By Poornima Gupta

DETROIT, March 28 (Reuters) - The United Auto Workers said on Wednesday it has rejected a new contract offer from bankrupt auto parts maker Delphi Corp., calling it "pathetic," and said it believes General Motors Corp. should do more to help resolve the dispute with Delphi, its former unit.

UAW Vice President Cal Rapson said the union met with Delphi , GM and Cerberus Capital, including David Thursfield, a former Ford Motor Co. executive and a member of the Cerberus management team, in Pontiac, Michigan, on March 21, to review the proposal. The proposal was rejected on March 26.

"They had a comprehensive proposal on the whole situation," Rapson, who heads the negotiating teams for Delphi and GM, told reporters on the sidelines of a convention on collective bargaining. "We took it back. We met on it...costed it out."

"It was a pathetic offer," Rapson said, adding that the union rejected the 29-page long proposal on Monday via phone.

Delphi, which filed for bankruptcy in October 2005, has been meeting with its unions, former parent GM and a group of investors that has offered to back a $3.4 billion financing plan to support the company's emergence from bankruptcy.

Delphi spokeswoman Lindsey Williams said the company continues to be in discussion with the union.

"We have made a commitment to the court and to the other parties that we would continue this process in an effort to reach a consensual resolution," Williams said.

"We as well as GM and planned investors remain in discussions with all of our unions; that includes the UAW," Williams said.


The rejection of the proposal to UAW jeopardizes the reorganization plan offered by a group led by Cerberus Capital Management LP and Appaloosa Management LP. It is contingent on Delphi reaching final agreements with its unions and GM and would give the investor group a controlling stake in the reorganized company.

When asked if he was disappointed in GM over the automaker's role in facilitating a deal, Rapson said, "Very."

"GM has got every bit of responsibility to help us get out of it," he said. " They are the ones pricing these products out in the future."

GM spokeswoman Renee Rashid-Merem said the automaker is still committed to the plan to help Delphi emerge from bankruptcy, but declined further comment.

Rapson said Delphi's offer came a day before a new bonus package of up to $37 million for Delphi executives was approved by a U.S. bankruptcy judge.

"Between the offer and retention bonuses, lots of people got upset," he said.

Rapson also criticized Delphi for spending $150 million so far on legal fees while trying to undercut pay and benefits for the workers.

He added that striking Delphi plants was a real possibility, given the type of wages and benefits that were being proposed.

"Ron has made it clear," he said, referring to UAW Chief Ron Gettelfinger.

Gettelfinger on Tuesday said the union will strike Delphi if the company voids its labor contracts. A strike at Delphi would also shut down GM plants, forcing the automaker to burn through billions of dollars a week. (Additional reporting by Jui Chakravorty in Detroit, Nick Zeiminski in New York)



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