Detroit Free Press

DETROIT – The United Auto Workers , outraged over handsome severance packages proposed for 21 Delphi Corp. executives, some of whom receive upward of $1 million a year, said Friday it will file a complaint with the bankruptcy court against the auto-parts supplier.

“It’s disgusting,” said UAW spokesman Paul Krell of the severance packages. Five of the top 21 executives receive between $800,000 and $1 million a year. Delphi Chief Executive Officer Steve Miller would not be covered by the severance proposal.

Krell said the UAW’s attorney will file a complaint protesting the auto supplier’s Key Employee Compensation Program with New York bankruptcy Judge Robert Drain in the coming weeks. Miller has said the compensation program is essential to keep valuable executives from leaving.

The proposed severance agreement – which provides compensation in the event Delphi terminates the officer’s employment without cause or if the officer quits for good reason – includes 18 months of salary and 18 months of bonuses. Currently all qualifying salaried employees receive severance pay for 12 months after leaving the company.

Delphi executives must agree to a noncompete agreement to accept the severance package, which is designed to keep them from leaving for a competitor.

“The day I got here I began to worry about keeping my management group intact,” Miller told reporters Wednesday. “It is disruptive and expensive to recruit replacements. There is no question they could get better compensation elsewhere, and I know for a fact that headhunters are swarming.

“Most adults fully understand that we have to be competitive to retain leadership if we are going to have the company survive bankruptcy.”

UAW officials were not sympathetic to Miller’s concerns of fleeting executives.

“Once again, we see the disgusting spectacle of the people at the top taking care of themselves at the same time they are demanding extraordinary sacrifices from their hourly workers,” said UAW President Ron Gettelfinger and UAW Vice President Richard Shoemaker in a written statement just after news of the severance packages broke last week.

Delphi said it was not concerned about the expected UAW filing.

“The UAW is well within their right to file a complaint, if that’s what they want to do,” said Lindsey Williams, a Delphi spokesman.

Meanwhile, Delphi, which employs 14,700 people in Michigan and 50,000 worldwide, is seeking wage cuts of as much as 63 percent for an estimated 33,000 U.S. hourly workers, either through voluntary union acceptance or through force of a bankruptcy court mandate. The UAW represents 25,000 of those workers, who would go from making an estimated $27 an hour to $10 an hour.

The Troy, Mich.-based auto supplier filed for Chapter 11 bankruptcy protection a week ago after its efforts to win concessions from its labor unions and a multibillion-dollar bailout from former owner General Motors Corp. failed.

The Chapter 11 filing gives Delphi – which lost $4.8 billion last year and $741 million through the first six months this year – relief from its creditors while it develops a plan that will include closing plants and imposing lower wages and benefits on workers. Delphi expects to emerge from bankruptcy in 2007.

The next stop in Delphi’s trip through bankruptcy court occurs Monday when a U.S. trustee selects a committee of unsecured creditors. This committee works to consult with Delphi’s executives, investigate the company’s problems and negotiate a plan of reorganization.

Krell said the UAW will be there to ensure the union’s interests are protected, though it cannot by law obtain a seat on the committee.