By Dina ElBoghdady
Washington Post Staff Writer
Wednesday, May 17, 2006; D03

The United Auto Workers union said its members at Delphi Corp. voted overwhelmingly to allow a strike against the company if the auto parts giant forces changes to its union contract through litigation.

The UAW said on its Web site that more than 95 percent of the votes cast at the 21 plants it represents were to authorize a strike. Of the six unions that represent Delphi's 33,000 hourly U.S. workers, the UAW represents 24,000 and is therefore the most influential.

Since filing for bankruptcy protection in October, Delphi has pressed the unions to accept deep pay cuts. When the unions resisted, the company asked a bankruptcy judge for permission to toss out its labor contracts, and the UAW threatened to strike.

A strike could cripple production at General Motors Corp., Delphi's largest customer and the world's largest automaker.

Delphi was the auto parts division of GM until it was spun off in 1999.

Many experts following the Delphi case said the UAW vote is a routine one that positions the union to react quickly should the court rule in Delphi's favor. It does not increase the likelihood of a strike, but it does add some pressure to the delicate negotiations between the union and the company.

Hearings on the matter began last week before Judge Robert D. Drain. After three days of testimony, Drain advised Delphi and the unions to keep talking until hearings resume on May 24. Both sides agreed to do so, and the UAW vote changes nothing, spokesmen from Delphi and GM said.

"This does not change our strategy or our activities because we continue to be in a position of reaching consensual agreement," said Lindsey Williams, a Delphi spokesman. "Nobody benefits from walking away."

Before turning to the court, Delphi offered two wage and benefits packages to the unions. But the UAW rejected both, arguing that each was too broad and too punitive.

The most recent offered workers $16.50 an hour, of which Delphi would pay $12.50 and GM would pay the rest -- which GM has not agreed to do. Financial and auto industry analysts say the outcome of the battle rests on whether GM will put up the money so Delphi can make an offer acceptable to the unions.

"The entire issue is not whether GM coughs up wage supplements but rather how much it will cough up," said David B. Healy, an analyst at Burnham Securities. "There's going to be a lot of horse trading that goes on here."

Rick Wagoner, GM's chief executive, said last week that he thinks a strike can be averted but that the company is stocking up on parts just in case. Wagoner also said he is not sure that having GM kick in money toward Delphi wages is an "optimal scenario."

Yesterday, GM said it remains committed to reaching a resolution with Delphi and the unions. But the resolution must be one that "makes sense to GM and its stockholders," said Dan Flores, a GM spokesman.

The UAW is not the first to authorize a strike at Delphi. The IUE-CWA, which represents about 8,500 employees at Delphi, did so weeks ago.

Both unions say Delphi did not negotiate in good faith before seeking rejection of the contracts. In court last week, the UAW also questioned Delphi's financial projections, including its assertion that it would lose $11 billion to $13 billion during the next five years if the union contracts stand.

The UAW said Delphi has not taken into account the results of a recent buyout offer, for which three-quarters of Delphi's workers are eligible. About 13,000 Delphi employees could retire early and 5,000 could move to jobs at GM.

Delphi said that even if it realizes the maximum savings from the buyouts, it will still lose billions of dollars.