Delphi continues its tightrope walk between cutting its labor costs and angering its unionized employees to the point of a strike - a move that would likely doom the company to Chapter 7 and could even send General Motors into bankruptcy itself. The court is now in the midst of a hearing on Delphi's request for authority to void its labor contracts so it can renegotiate with the various unions that represent its employees. The hearing has taken on more of the air of a trial and is expected to continue for a few weeks, and a final ruling may not come for several weeks after. In the meantime, the United Auto Workers has asked its local units to hold strike authorization votes by May 14. Negotiations are ongoing, but several local units have already reported that their members have approved a strike.

In an interesting move, the UAW filed a motion asking the bankruptcy court to prevent various creditor and shareholder committees from participating in the hearing. A UAW attorney said having third parties involved could interfere with the negotiation process, while attorneys for creditors complained that anything less than full participation endangers their clients' interests. On Tuesday, the court ruled that these creditors could have their say, but cautioned that their participation would be confined to specific areas that would affect their interests.

Meanwhile, GM is reportedly stockpiling parts in the event of a Delphi strike, lest its own turnaround efforts get derailed. Other auto makers, such as Toyota, Honda and Mercedes-Benz could also be affected.

On Wednesday, International Truck and Engine Corp., which makes trucks, busses and diesel engines, filed a motion asking the court to prevent workers from walking out if a strike is authorized. The company argued that such a strike could have major ramifications on the global economy.

http://www.marketwatch.com/News/Story/Story.aspx?dist=newsfinder&siteid=google&guid=%7BAA986E18-D67D-4961-925D-B399CC7688EF%7D&keyword=

http://www.freep.com/apps/pbcs.dll/article?AID=/20060511/BUSINESS01/605110354

Mac