UAW rejects Delphi financing deadline

UAW rejects Delphi financing deadline

	Published : Thu, 01 Feb 2007 23:48 By : Agencies Print this Story

DETROIT (AFX) - A deal designed to bring bankrupt Delphi Corp. a critical infusion of cash took a punch Thursday when United Auto Workers leaders said the union would not negotiate wages and benefits against the other parties' deadlines.

Three private equity investors -- Appaloosa Management LP, Cerberus Capital Management LP and Harbinger Capital Partners Master Fund I -- along with Merrill Lynch & Co. and UBS Securities LLC have agreed to invest $1.4 billion to $3.4 billion in a restructured Delphi.

The investors and Delphi each had the right to terminate the agreement Wednesday if no deal was reached with Delphi's unions, which include the UAW, and General Motors Corp., which once owned Delphi. The deal was contingent upon Delphi settling on wages, benefits and other issues with its unions.

Wednesday's deadline passed without an agreement, but a person familiar with the negotiations said talks likely would continue into February or beyond because investors have no intention of walking away from the deal. The person asked not to be identified for fear of jeopardizing the negotiations.

In a statement to UAW members released Wednesday afternoon, union President Ron Gettelfinger and Vice President Cal Rapson said the Wednesday deadline was set without consulting the union.

'Unfortunately, neither the company nor the potential investors has demonstrated a willingness to resolve the substantial issues which divide us,' the statement said. 'While the UAW desires to work with the company and its potential investors in order to allow Delphi to emerge from bankruptcy, we will not negotiate any agreements on a company imposed timeline.

' ... The UAW will be guided only by our desire to advocate for the best interests of our members, retirees and their communities.'

Delphi has been operating under bankruptcy protection since October 2005. It hopes to emerge from Chapter 11 this year.

The deal would leave the private equity investors owning as much as 72 percent of Delphi, which makes auto parts including entertainment systems, chassis, electronics and air conditioning.

Delphi plans to dissolve its current 560 million shares and issue 135.3 million shares of new common stock. Current Delphi shareholders would divide up 3 million shares of the new stock, plus they would get rights to buy more new shares at a discount.

AP Business Writer Tom Krisher contributed to this report.