 Delphi says that the job cuts are the best way to save its business |
Workers at US car parts maker Delphi have authorised union leaders to call a strike if the bankrupt firm tries to alter their work contracts. Delphi has told a bankruptcy court that it needs to void existing deals and impose salary and benefit cuts.
About 24,000 United Auto Workers union workers at 21 Delphi plants voted for the action by a majority of 95%.
Any strike would paralyse production at Delphi's biggest customer and former parent company, General Motors.
GM's falling profits
US analysts have estimated that a strike could close GM's assembly plants within 48 hours and cost the firm billions of dollars.
Delphi's earnings have suffered as increased competition and falling demand have eroded profits at GM.
The company, which is in Chapter 11 bankruptcy protection, has said it needs to reduce costs and has proposed a plan that would cut 23,000 jobs, close 25 plants and cut benefits for staff and retirees.
Last week the company told a bankruptcy court that it would be better for the firm to endure a spate of strikes now, rather than next year.
A judge delayed making a ruling, giving both sides more time to reach an agreement.
Safety net
Complicating matters is an agreement with GM, in which the former Delphi owner has guaranteed the pensions and benefit obligations of workers should its supplier be unable to meet them.
GM has estimated that the guarantee could cost it between $5.5bn (�3bn) to $12bn.
Delphi is keen to put its restructuring plan in place before the agreement expires because it expects negotiations to become more difficult once this safety net is removed.
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