By Nick Aziz
Thursday, Mar 30th, 2006 @ 8:02 am

The United Auto Workers have rejected an offer from bankrupt auto parts supplier Delphi to reduce wages by 35 percent. Because a deal cannot be reached, Delphi is expected to ask a judge to terminate labor contracts and eliminate retiree medical and life insurance benefits. Such a move would make a strike by Delphi’s 33,000 workers almost unavoidable. The strike would likely occur in May. Delphi was formerly a part of GM, and is still a major supplier to the company. A Delphi strike would be devastating to GM, which is struggling to return to profitability. During the first 60 days of a strike, GM would burn through $7 billion to $8 billion of cash, analyst John Murphy of Merrill Lynch said in a report to clients on Wednesday. (GM’s entire loss for 2005 was $10 billion). During a strike, the company “would bleed enormous amounts of cash,” Murphy said.

  

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