Memorandum of Understanding - International Union, UAW, Delphi Corp. and General Motors Corp.
UAW-DELPHI-GM
MEMORANDUM OF UNDERSTANDING
DELPHI RESTRUCTURING
INTRODUCTION
The International Union, UAW, Delphi Corporation and General Motors Corporation
("the Parties") have discussed the challenges impacting Delphi and its
UAW-represented operations. As GM's largest supplier and the employer of
thousands of UAW-represented employees, indirectly supporting tens of thousands
of dependents, retirees and surviving spouses, the Parties have a critical
interest in Delphi's successful emergence from bankruptcy with certain
UAW-represented operations. The Parties acknowledge that restructuring actions
are necessary and commit to take specific actions to protect the needs of the
Parties and their constituencies, continuing progress already made toward
transforming Delphi's labor cost structure and ongoing business operations.
The UAW has already agreed to an attrition program pursuant to which thousands
of employees at traditional Big Three wages and benefits took buy outs,
flowbacks to GM, or retired, and the UAW waived Delphi obligations to hire
thousands of new employees as a result of the departures caused by the attrition
program. The Parties have also agreed to the "Term Sheet - Delphi Pension Freeze
and Cessation of OPEB, and GM Consensual Triggering of Benefit Guarantee"
(attached as Attachment B, hereinafter the "Term Sheet"), facilitating the
freeze of Delphi's pension plan and the assumption of billions of dollars of
OPEB liabilities by GM, thereby dramatically reducing Delphi's ongoing benefit
costs and liabilities.
In addition to the above, to enable continued transformation to more competitive
wage and benefit levels, to address capacity, divestiture, work rules and
staffing level issues, and to better position Delphi to retain existing business
and attract new business, the Parties agree as follows on a two-party or
three-party basis, as applicable, (the "Agreement") subject to ratification by
the membership.
A. DURATION
1. This Agreement will continue until 11:59 p.m. on September 14,
2011.
2. Delphi and the UAW agree that the UAW-Delphi Supplemental
Agreement dated April 29, 2004 (the "Supplemental Agreement")
shall continue in full force and effect, as modified herein, for
its stated duration, i.e. until 11:59 p.m. on September 14, 2011.
The 2003-2007
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UAW-Delphi National Agreement, and including without limitation
the supplemental agreements attached as exhibits thereto (the
"National Agreement"), are hereby extended, as modified herein,
until 11:59 p.m. on September 14, 2011.
3. Delphi and the UAW agree that the current Local Agreements are
extended until 11:59 p.m. on September 14, 2011, except as may be
mutually modified by the local parties pursuant to Section E
below, and as modified by this Agreement as modified by this
Agreement and summarized in the matrix of modified and eliminated
provisions in Attachment E hereto.
4. The agreements comprising the UAW-Delphi collective bargaining
agreements, national and local, following the date of this
Agreement are set forth in Attachment E hereto.
B. SITE PLAN
The UAW and Delphi agree that Article 2 of the Supplemental Agreement,
Document 13 and Document 91 of the National Agreement shall remain in
effect through September 14, 2011, and are waived to the extent
necessary to implement the site plans outlined below and as described
in detail in Attachment A ("Site Plans"). GM and Delphi agree to
implement the site plans as outlined below and described in detail in
Attachment A.
1. Sites to remain owned and operated by Delphi ("Keep Sites"):
Kokomo
Lockport
Rochester
Grand Rapids
2. Sites to be held for divestiture as ongoing businesses by Delphi
("Sell Sites"):
Saginaw Steering - Saginaw
Sandusky
Adrian
Cottondale
The Parties agree that if divestiture of the Saginaw Steering -
Saginaw, Sandusky and Adrian sites are not concluded (by December
31, 2008, for Sandusky and Adrian, and by December 31, 2010 for
Saginaw), GM will cause the operations and all active and
inactive bargaining unit employees to be transferred to
employment with a third
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party so that Delphi will have no further operational or
employment responsibility for the site(s). If the respective
transfers will not be completed by the dates identified above,
the Parties agree that prior to the required date, GM and the UAW
will implement a solution such that Delphi will have no further
responsibility for the operation of future production at the
Saginaw, Sandusky and Adrian sites as identified above, nor will
the bargaining unit employees remain as Delphi employees, but the
terms and conditions of the current collective bargaining
agreement will continue to apply to such employees.
3. Footprint Sites
Flint East - Business operated by GM or provided by GM to a third
party designated by GM will operate at a geographically proximate
site, providing a total of approximately 1,000 jobs. No later
than December 31, 2008, the Parties agree that GM will cause the
active and inactive bargaining unit employees at Flint - East to
transfer to employment with a third party. Delphi and the UAW
will cooperate with the transfer. If the transfers of the active
and inactive bargaining unit employees will not be completed by
this date, the Parties agree that prior to December 31, 2008 GM
and the UAW will implement a solution such that Delphi will have
no further responsibility for the operation of future production
at the Flint East site, nor will the bargaining unit employees
remain as Delphi employees. If it remains necessary after
December 31, 2008 for Delphi to complete the currently existing
cluster programs through their OE expiration dates, Delphi would
manage such programs using contracted need-to-run UAW labor from
the third party or from other resources as specified by GM. From
time to time, commencing on October 1, 2007, as Delphi's
need-to-run ("NTR") headcount declines, GM will cause the active
and inactive bargaining unit employees to transfer to employment
with a third party. Delphi and the UAW will also cooperate with
these transfers. If new work is not available for these
employees, then GM and the UAW will implement a solution such
that these bargaining unit employees will no longer remain as
Delphi employees.
Needmore Rd. - Business operated by GM or provided by GM to a
third party will operate at a geographically proximate site
designated by GM, providing a total of approximately 750 jobs. On
the earlier of thirty (30) days following the end of OE
production of current programs at Needmore Road (which is
currently scheduled for June 30, 2008), or December 31, 2008, the
Parties agree that GM will cause the active and inactive
bargaining unit employees at Needmore Road to transfer to
employment with a third party. Delphi and the UAW will cooperate
with the transfer. If the transfer of all active and inactive
bargaining unit employees will not be completed as described
above, the Parties
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agree that prior to the required date GM and the UAW will
implement a solution such that Delphi will have no further
responsibility for the operation of future production at the
Needmore Rd. site, nor will the bargaining unit employees remain
as Delphi employees.
Saginaw Mfg. - Business provided by GM to a third party will
operate at the current site or another geographically proximate
site designated by GM, providing approximately 500 jobs. No later
than December 31, 2008, the Parties agree that GM will cause the
active and inactive bargaining unit employees at Saginaw
Manufacturing to transfer to employment with a third party.
Delphi and the UAW will cooperate with the transfer. If the
transfer of all active and inactive bargaining unit employees to
a third party is not completed by the date identified above, GM
and the UAW will, prior to the required date, implement a
solution such that Delphi will have no further responsibility for
the operation of future production at the Saginaw Mfg. site, nor
will the bargaining unit employees remain as Delphi employees.
4. Sites to be wound down or consolidated by Delphi in accordance
with Delphi's restructuring plan and timing ("Wind Down Sites"):
Columbus
Milwaukee PWT (E&C)
Milwaukee E&S
Coopersville
Anderson
Wichita Falls
Fitzgerald
Olathe
Laurel
Athens
C. WORKFORCE TRANSITION
1. Current Employee Flowback
Employees on roll prior to October 8, 2005 ("Flowback-Eligible
Employees") without a valid flowback application on file will be
afforded a final opportunity to make application for flowback by
October 1, 2007.
Eligible Delphi employees hired prior to October 18, 1999 will
receive closed plant treatment for purposes of job offers at GM
plants. Employees from those plants who apply will have their
seniority co-mingled with the seniority of GM employees who are
eligible for closed plant treatment for purposes of job offers to
GM openings in accordance with Appendix A.4 and 5 of the 2003
UAW-GM National
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Agreement. A $67,000 relocation allowance will be paid to
otherwise eligible employees from AHG - Anderson, PT -
Coopersville, AHG - Wichita Falls, AHG - Fitzgerald, AHG -
Columbus (except MFD - Mansfield), PT - Milwaukee, E&S -
Milwaukee, and Steering - Athens (except Spring Hill assembly
plant) who flow at the time the plant ceases operations to a
General Motors Extended Area Hire plant. All other
Flowback-eligible employees will be eligible for a relocation
allowance in accordance with Paragraph (96a)(2)(a) of the 2003
UAW-Delphi National Agreement.
AHG-Columbus will be in the MFD-Mansfield plant Area Hire area
and employees will be eligible for relocation allowance in
accordance with Paragraph (96a)(2)(a) of the UAW-Delphi National
Agreement.
Delphi - Athens will be placed in the General Motors Spring Hill
area hire for purposes of placement. Flowback opportunities to
Spring Hill will be made available to 300 Traditional Delphi
employees (defined in Section C.5.a below) or the number of
Traditional employees remaining after the Delphi Special
Attrition Program whichever is less. No relocation will be paid
for the flowback. The flowback opportunities will begin at the
earlier of:
a) March 1, 2009
b) When layoffs begin at Athens
c) Spring Hill needs people
Upon transfer to Spring Hill from Athens, if no jobs are
available, the employee will be placed on layoff and then will be
under the SUB and Job Security terms of the GM-UAW National
Agreement. No employee being transferred can take a job in the
plant unless a job is available. If there are surplus people at
Spring Hill, the parties agree to look for ways to reduce the
surplus including, but not limited to:
a) A Special Attrition Program at Spring Hill
b) Placement at other GM plants such as Bowling Green
As of the Effective Date of this Agreement (defined in Section
K.1 below), Delphi employees who are otherwise eligible and who
have an application on file will be eligible for flowback
opportunities for the same length of time as the length of their
seniority (time-for-time).
GM employees are no longer eligible for flowback to Delphi.
2. UAW-Delphi Employees Hired After October 18, 1999 and Prior to
October 8, 2005 - Agreement between the Parties to offer job
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opportunities at GM
a. Employees will be offered the job opportunities at GM after
the Appendix A Placement Process and the UAW-GM-Delphi
Flowback Agreement have been exhausted.
b. Employees will be eligible for relocation allowance in
accordance with Appendix A VI and Paragraphs (96a)(1), (2),
(3), and (4) of the 2003 UAW-Delphi National Agreement.
c. Employees will acquire GM seniority on the date of hire at
the new location and will receive a new plant seniority date
that is the effective date of hire. The new plant seniority
date will also be the date used in the administration of
Appendix A, Memorandum of Understanding - Employee Placement
in the UAW-GM National Agreement.
d. Employees hired by GM will receive the same benefits
treatment as other employees who transfer to GM under the
UAW-GM-Delphi Flowback Agreement in accordance with the
UAW-GM-Delphi Memorandum of Understanding, Benefit Plan
Treatment dated September 30, 1999 as amended.
e. Initial vacation entitlement at GM will be the same as that
at Delphi as of the date immediately prior to the transfer.
f. Employees will receive a wage rate in the same progression
as they were in at Delphi and in accordance with Paragraph
(98) of the UAW-GM National Agreement.
g. These employees will be SEL protected at GM unless noted
otherwise.
3. Delphi to Delphi Transfers
Delphi employees (excluding temporary employees) covered by the
Supplemental Agreement ("Supplemental Employees") with seniority
as of the Effective Date of this Agreement, will have rights to
other Delphi plants outside their own Area Hire area prior to
permanent new hires and will be eligible for relocation allowance
in accordance with Paragraph (96a)(2)(a).
4. Temporary Employees
It is mutually agreed between the parties that employees hired as
temporary employees in UAW-Delphi plants will be converted to
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permanent employees on the Effective Date of this Agreement. Such
employees will receive credit for time worked as a temporary
employee toward establishing a seniority date pursuant to
Paragraph (57) of the UAW-Delphi National Agreement. Employees
who worked for Delphi as of January 1, 1999 or later, or
employees who accepted an option under the GM or Delphi Special
Attrition Programs, are not eligible to be converted to permanent
status. Employees hired July 2, 2007 and later will be hired as
temporary employees under the provisions of Appendix A. X -
Memorandum of Understanding Employee Placement-Section X-Vacation
Replacements and Other Employees Hired for Temporary Work,
subject to review of the National Parties.
5. Transformation Program Options
Delphi and the UAW agree on the following Transformation Program
options which will be offered at all Delphi sites. The Retirement
Incentives and Buy Out are subject to the terms of Attachment C,
and are generally described below.
a. Retirement Incentives - Traditional Employees
Retirement options will be provided for Delphi employees not
covered by the Supplemental Agreement to be effective no
later than September 1, 2007 as described in Attachment C
and summarized below:
1) $35,000 for normal or early voluntary retirements
2) 50 & 10 Mutually Satisfactory Retirement (MSR)
3) Pre-retirement program covering employees with at least
26 years of credited service but less than 30 years as
of September 1, 2007
4) These retiring employees will be considered to have
flowed back to GM for purposes of retirement ("Check
the Box") and be treated consistent with the Check the
Box retirements under the UAW-GM-Delphi Special
Attrition Program.
5) Participation conditioned on release of claims
b. Buy Out - Traditional Employees
1) The amount of the Buy Out Payments shall be as follows,
subject to release of claims:
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i. Traditional Employees with 10 or more years of
seniority or credited service, whichever is
greater, will be eligible for a Buy Out payment of
$140,000
ii. Traditional Employees with less than 10 years of
seniority will be eligible for a Buy Out payment
of $70,000
2) Buy Outs will be effective when the employee's services
are no longer required, but in any event no later than
September 15, 2007. Employees will sever all ties with
GM and Delphi except for any vested pension benefits
(as such no pension supplements are payable).
3) As necessary, employees who have accepted a Buy Out may
be rehired as temporary employees to satisfy any
operating needs. Any employee rehired as a temporary
employee will not be eligible for any coverage or
benefits under the Term Sheet. Further, any employee
rehired as a temporary employee shall receive the
starting wage rate applicable for a new temporary
employee. Such temporary employees will not be eligible
for any future attrition or Severance Payments.
c. Buy Down - Traditional Employees
1) Effective October 1, 2007 all Traditional Employees,
both production and skilled trades, other than
pre-retirement program participants, will become
Supplemental Employees and will be covered by all
provisions of the Supplemental Agreement.
2) Buy Down payments will be made to Traditional
production employees as described below and will not
exceed $105,000.
a) Traditional production employees on active status
(including Protected Status, but excluding
pre-retirement program participants), and
Traditional production employees on temporary
layoff as of October 1, 2007 will be eligible for
the Buy Down payments.
b) The $105,000 Buy Down payment will be paid out in
three (3) equal installments of $35,000, less
applicable withholding, in the first pay ending
after October 1, 2007, October 1, 2008, and
October 1, 2009 provided the employee is on active
status, receiving holiday pay, paid vacation, jury
duty, military leave, or temporary layoff status
on each of those three (3) dates. The October 1,
2008 and October 1, 2009 payments will be prorated
based on the
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number of pay periods worked and the rate of
compensation in the preceding 52-week period.
Treatment of employees on disability or Workers'
Compensation leave is in accordance with (d) and
(e), below.
c) Traditional production employees who are on a
leave of absence other than Sickness and Accident
(S&A), Extended Disability (EDB), and Workers
Compensation on October 1, 2007 will be eligible
for the first $35,000 payment, less applicable
withholding, at the time they return to work if
they return to work prior to October 1, 2008. The
two (2) subsequent payments will be pro-rated
based on the number of pay periods worked during
the year immediately prior to the October 1st
date. Additionally, the two (2) subsequent
payments also will be adjusted by time spent on
disability during the year immediately prior to
the October 1st date, as described in (e), below.
d) Sickness & Accident (S&A) benefits, Extended
Disability Benefits (EDB), health care, life
insurance and other applicable benefits will be
reduced on October 1, 2007 to Supplemental
Agreement levels for Traditional Employees who are
on disability or Workers' Compensation leave on
October 1, 2007. Traditional production employees
will be eligible to receive a $35,000 Buy Down
payment on October 1, 2007.
e) Traditional production employees who are eligible
for Buy Down payments and who are on or commence a
disability or Worker's Compensation leave on or
after October 1, 2007, will be eligible for the
2nd and 3rd Buy Down payments pro-rated for the
time they spent on disability or Worker's
Compensation leave during the year immediately
preceding the date of each subsequent Buy Down
payment. The pro-rated amount that will be
included in the Buy Down payment for the period
spent on disability or Workers' Compensation leave
will have the same percentage relationship to the
full Buy Down amount as the employee's applicable
Sickness & Accident or Extended Disability Benefit
schedule of benefits has to their base hourly rate
for the applicable periods of leave.
f) Traditional Production employees on active status
(including Protected Status, but excluding
pre-retirement program participants), and
Traditional production employees on temporary
layoff as of October 1, 2007 who do not elect an
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option as described in Attachment C will become
Supplemental Employees and will be covered by all
provisions of the Supplemental Agreement as
described in Paragraph C.5.c. 1-2 e of this Buy
Down section. Employees must sign a Conditions of
Participation Release Form in order to receive the
$35,000 lump sum payment.
g) Traditional production employees who are in a
plant that is wound down on October 1, 2007 who do
not elect an option under the Special Attrition
Program - Transformation (Attachment C), will
become Supplemental employees and will be covered
by all provisions of the Supplemental Agreement as
described in Paragraph C.5.c.1-2 e of this Buy
Down section and will be placed on layoff
effective October 1, 2007. The employees will
receive the October 1, 2007 $35,000 lump sum
payment, less applicable withholding, if they sign
the Conditions of Participation Release Form.
These laid off employees will not be eligible for
any future Buy Down payments, but can collect SUB,
if otherwise eligible.
h) Traditional skilled trades employees who are on
roll October 1, 2007 and receiving compensation
will be eligible for a one time buy down payment
of $10,000, less applicable withholding, in the
first pay ending after October 1, 2007.
Traditional skilled trades employees will have the
COLA in effect as of the Effective Date of this
Agreement frozen at that level through October 1,
2007. Any Traditional skilled trades employees who
are Bought Down and remain on roll will have such
frozen COLA folded into their base rate effective
October 1, 2007, and will thereafter be covered by
the skilled trades wage and benefit provisions of
the Supplemental Agreement.
i) Employees must sign a Conditions of Participation
Release Form in order to receive the lump sum
payments.
j) No further Buy Down payments will be payable to
any employee who flows back to GM or severs their
employment with Delphi.
3) In determining the wages and benefits for Traditional
Employees who Buy Down to Supplemental Employee status,
such employees will be given credit for time spent as a
Delphi Traditional Employee at traditional wages and
benefits (i.e., will
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not be treated as new hires for purposes of applying
Supplemental Agreement wage and benefit schedules).
4) Traditional Employees electing a Buy Down will retain
eligibility for OPEB and pension benefit treatment
under the Term Sheet without regard to such election.
6. Severance Payments
Delphi and the UAW agree that any Supplemental or Temporary
Employees on the active employment rolls as of the Effective Date
of this Agreement at any "Keep," "Sell," "Footprint," or "Wind
Down" sites (excluding employees who previously received a Buy
Out payment from Delphi and were rehired as temporary employees),
who are permanently laid off prior to September 14, 2011, shall
be eligible for a lump sum severance payment equal to $1,500 for
each month of his/her combined service with Delphi and, in the
case of sold facilities, the new owner. The maximum amount of
severance pay is $40,000, less applicable withholdings. Employees
must sign a Conditions of Participation Release Form in order to
receive the Severance Payment. The Parties agree that employees
who are separated will sever all ties with GM and Delphi except
for any vested pension benefits (as such no pension supplements
are payable), if any.
Employees who are on roll on the Effective Date of this Agreement
who are also eligible for Supplemental Employee Benefits (SUB)
will have their choice of SUB or the Severance Payment specified
above but will not be entitled to both.
Employees hired after the Effective Date of this Agreement who
have 3 or more years of seniority at the time their services are
no longer required but prior to September 14, 2011 may elect a
$40,000 severance payment or SUB as specified in the Supplemental
Agreement.
Permanent employees covered by the Supplemental Agreement placed
on indefinite layoff from the AHG- Fitzgerald plant after May 1,
2007 and prior to the Effective Date of this Agreement will be
eligible for the severance payment provided they sign the
required Conditions of Participation Release form.
7. Any problems with the implementation of this Transformation
section will be discussed by the National Parties in order to
agree on an equitable solution.
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D. MODIFICATIONS TO THE 2004 SUPPLEMENTAL AGREEMENT
The UAW and Delphi agree to the following Supplemental Agreement
modifications:
1. Wages
The UAW and Delphi agree that wages for Supplemental Employees, and
for Traditional Employees who Buy Down will continue to be determined
in accordance with the Supplemental Agreement except as modified
below:
a. Wage Progression. For production employees hired prior to the
Effective Date of this Agreement, the 3% wage progression
increases will be discontinued subject to the following:
(i) Employees in groups A, B, or C (as defined in the
Supplemental Agreement) hired before the Effective Date
whose base hourly wage rate , as of the Effective Date,
exceeds the respective group's 2007 Floor Rate as described
below, will receive his/her next scheduled wage progression
increase, as defined in the 2004 Supplemental Agreement,
following the Effective Date, and will thereafter receive
wage increases only as described in Section D.1.d below. In
the event such final wage progression increase occurs on or
after December 31, 2007, it shall be adjusted upward to
reflect the impact of any Wage Formula increase effective on
that date, as described in Section D.1.d below.
(ii) Employees in groups A, B, or C hired before the Effective
Date whose base hourly wage rate , as of the Effective Date,
is at or below the respective group's 2007 Floor Rate as
described below will continue to receive scheduled wage
progression increases as defined in the 2004 Supplemental
Agreement, if any, required to bring such employee up to the
respective group's 2007 Floor Rate. Any employee who has not
reached his/her respective Floor Rate through scheduled wage
progression increases will be automatically moved to the
Floor Rate effective December 31, 2007, and will thereafter
receive wage increases only as described in D.1.d below. Any
wage increases described in D.1.d. below will be applied to
an employee's base wage rate following application of any
automatic increase up to his/her respective group's Floor
Rate. (The examples provided in Attachment F are provided
for reference in the administration of this provision).
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Supplemental 2007
Wage Group Floor Rate*
------------ -----------
A $16.23
B $15.30
C $14.50
* The Floor Rate will be adjusted at the beginning of each year as described
in Section D.1.d below.
(iii) An employee in Group D ("Screw Machine Operator" and "Screw
Machine Operator - Trainee") hired before the Effective Date
whose base hourly rate , as of the Effective Date of this
Agreement, is at or below his/her first progression step
(i.e. $18.50) shall have his/her base rate increased to this
first progression step on such date, and increased further
to the second (and final) progression step of $19.50,
effective December 31, 2007. The final progression step of
$19.50 shall be the initial Floor Rate for Group D
employees. Thereafter, such employees will receive wage
increases only as described in Section D.1.d below, and
consistent with the methodology as described in D.1.a.(i)
and (ii) above.
(iv) Traditional Employees taking the Buy-Down to Supplemental
Employee status will be given credit in the wage progression
schedule for time as a Traditional Employee up to the
current wage maximum in each respective Supplemental
Agreement wage group and will thereafter be treated as
described in Section D.1.a.(i) above.
b. Production Employee New Hire Rates
For all production employees hired after the Effective Date of
this Agreement, new hire rates shall be established at the
greater of (a) $14.00 per hour, or (b) 90% of the prevailing
Floor Rate for the respective classification. As a temporary
exception, employees newly hired into classifications belonging
to Wage Group A between the Effective Date of this Agreement and
December 31, 2007, will start at an initial hire rate of $14.42
per hour. The wage rate of employees hired under this temporary
exception will be adjusted to $14.61 effective December 31, 2007,
and thereafter proceed under the normal progression schedule as
described below based on his/her hire date. Employees hired at
the 90% level will receive four wage progression increases, one
every 26 weeks in an amount equal to 2.5% of the then-prevailing
Floor Rate, until reaching the Floor Rate for the relevant
classification
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over the course of 104 weeks. Employees hired at the $14.00 rate
will receive four wage progression increases, one every 26 weeks,
in the amount necessary to achieve the then-prevailing Floor Rate
over the course of 104 weeks in four proportional increases.
These proportional increases shall be equal to the difference
between the then-prevailing Floor Rate for the classification and
the employee's then-current rate multiplied by 25% for the first
progression increase; 33% for the second; 50% for the third; and
100% for the fourth and final progression increase. All new hires
will also receive the wage increases described in Section D.1.d
below.
c. COLA
As of the Effective Date of this Agreement, Skilled Trades
employees covered by the Supplemental Agreement will have all
accrued COLA folded into their base rates. Thereafter, future
COLA adjustments shall be eliminated and replaced by Wage Formula
increases as described in Section D.1.d below. With respect to
the January, 2008 Wage Formula increase, the applicable
percentage adjustment shall be applied to each employee's base
wage rate, including any applicable COLA folded in as of the
Effective Date. Supplemental Production Employees hired prior to
the Effective Date, and on active status as of August 1, 2007,
will be eligible to receive a one-time COLA make-up adjustment
payment in the amount of $350 payable during the week of August
6, 2007.
d. Wage Formula Increases
Effective with the Monday of the week that includes the first
scheduled workday of 2008 (12/31/2007), 2009 (1/5/2009), 2010
1/4/2010 and 2011 (1/3/2011), the hourly wage rate for each
production and Skilled Trades employee will be increased by a
percentage equal to the greater of (a) the annual percentage
increase in average hourly earnings, excluding overtime, of
employees in the Manufacturing sector (BLS Series CEU3000000033)
or (b) the annual percentage increase in the All Items, Less
Medical, CPI-W Index (1982-84=100), both as calculated for the 12
month period ending with the month of August prior to the
respective increase date. In the event a calculated increase
exceeds 3.75%, wages will be increased by 3.75% and the parties
will determine a mutually acceptable disposition of the excess,
guided by the twin goals of enhancing UAW members' job and income
security and the company's competitiveness. In the event the wage
formula generates a negative result, wages will not be reduced.
Instead, the negative result, up to a negative 3.75%,
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would be used as a direct offset to the next subsequent formula
increase (and subsequent increases after that, if necessary,
until fully offset). For example, if the formula produced a
negative result of 1.34% in one year followed by a 2.45% increase
in the next year, the adjusted increase in the second year would
be a net 1.11%. The engineering method of rounding will be
adopted for all Wage Formula calculations: to three decimal
places for the Manufacturing sector average hourly earnings
component; to four decimal places for the annual inflation
component; to four decimal places for year-to-year percentage
changes for each of these components; and to two decimal places
for new base hourly wage rates following application of a four
decimal Wage Formula increase.
e. Wage Formula Basis
In the event that either of the BLS Series data as referenced
above is eliminated, the parties will adopt a mutually agreeable
successor or replacement series for use in future calculations.
When calculating a Wage Formula result for a current year, BLS
data from the preceding year's calculation will become the basis
for the current year formula and will not be changed to reflect
subsequent revisions in the published data, nor will a Wage
Formula adjustment for a prior year be changed as a result of
subsequent revisions in the underlying data.
2. Individual Retirement Plan and Personal Savings Plan
Covered Employees under the Term Sheet (Attachment B) are not eligible
to participate in the Individual Retirement Plan provisions of the
Delphi pension plan or receive a company match to the Personal Savings
Plan for the period of time they are eligible to accrue credited
service in the GM pension plan in accordance with the Term Sheet.
3. Post Retirement Health Care Account
Covered Employees who can attain eligibility to receive GM OPEB under
the Term Sheet (Attachment B) are not eligible to receive credits in
the Retiree Medical Account.
E. LOCAL NEGOTIATIONS
The UAW and Delphi agree that local negotiations regarding work rules and
other local agreement issues will be conducted on an expedited basis
immediately upon ratification of this Agreement, with the support and
assistance of the National Parties, at all "Keep", "Sell" and "Footprint"
sites (see Section B and Attachment A, D). At facilities to be
sold/transferred, such local negotiations will involve the new owner.
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<PAGE>
F. PENSION AND OPEB / BENEFIT GUARANTEE
1. The Parties have agreed to a Term Sheet with respect to the freezing
of Delphi's pension plan, the cessation of Other Post Employment
Benefits (OPEB) for Delphi employees and retirees and the consensual
triggering of the GM-UAW Benefit Guarantee. That agreement, the Term
Sheet, is attached as Attachment B, and is incorporated by reference
herein.
2.
a. GM and the UAW agree that the period of time on or before which
GM's obligations under sections b., c., d., and e. of the Benefit
Guarantee Agreement between GM and the UAW, dated September 30, 1999
("Benefit Guarantee"), may be triggered shall be extended to December
31, 2007 (and to March 31, 2008 if Delphi has commenced solicitation
of acceptances of its chapter 11 plan of reorganization prior to
December 31, 2007 but the plan has not been confirmed and
substantially consummated or such later date as Delphi and GM shall
agree to extend the Indemnification Agreement expiration in Section
F.2.c)), provided, however that notwithstanding the foregoing or any
other provision of this Agreement, this extension shall be without
prejudice to any rights, defenses or claims of any Party with respect
to the Benefit Guarantee.
b. Notwithstanding anything to the contrary in the Benefit Guarantee,
this Agreement, or the Benefit Guarantee Term Sheet (Attachment B), GM
and the UAW hereby agree that if, at any time prior to the Effective
Date, as defined in Attachment B (including the event that such
Effective Date never occurs):
1) Delphi or its successor company(ies) terminates its pension plan
covering the Covered Employees or ceases to provide on-going
credited service for the Covered Employees working at Delphi or
its successor company(ies), as applicable, section b. of the
Benefit Guarantee will be triggered for such Covered Employees to
whom such cessation or termination applies; or
2) Delphi fails or refuses to provide post-retirement medical
benefits to Covered Employees retired from Delphi with
eligibility for such benefits prior to September 1, 2007, or
Delphi reduces the level of post-retirement medical benefits for
such Covered Employees below the level of benefits which GM is
providing to its UAW-represented retirees, section c. of the
Benefit Guarantee will be triggered for all such Covered
Employees to whom such failure,
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<PAGE>
refusal or reduction applies, except for any Covered Employee who
is a "check the box" retiree.
Any such triggering in this Section F.2.b. will be subject to all
other terms and conditions of the Benefit Guarantee. All terms of
this Section F.2.b (even any that have already become effective)
will be superseded in their entirety by Attachment B if and when
Attachment B becomes effective. Notwithstanding the foregoing or
any other provision of this Agreement, any triggering of the
Benefit Guarantee hereunder as between GM and the UAW shall be
without prejudice to the rights, defenses or claims of any Party
with respect to the Benefit Guarantee (including, without
limitation, Delphi, which the UAW and GM acknowledge has neither
agreed nor consented to the triggering of the Benefit Guarantee
pursuant to this Agreement or otherwise), except as to GM
regarding its agreement to trigger as specifically provided for
in this section F.2.b.
c. Delphi and GM agree that the eighth anniversary date reference in
paragraph L of the Agreement between Delphi and GM, with respect to
the Benefit Guarantee, dated as of December 22, 1999 (the
"Indemnification Agreement"), i.e. October 18, 2007, shall be extended
to December 31, 2007 (and to March 31, 2008 if Delphi has commenced
solicitation of acceptances of its chapter 11 plan of reorganization
prior to December 31, 2007 but the plan has not been confirmed and
substantially consummated or such later date as Delphi and GM shall
mutually agree); provided, however that notwithstanding the foregoing
or any other provision of this Agreement, this extension shall be
subject to a full reservation of rights to challenge on any grounds
the validity or enforceability of the Indemnity Agreement or any claim
GM has made or may make in connection with the Indemnity Agreement,
and GM expressly agrees and acknowledges that nothing herein shall be
deemed to be, or shall be evidence of, any waiver of any defense
Delphi has concerning the Indemnity Agreement or any claim there under
or otherwise including defenses arising out or related to the
triggering of the Benefit Guarantee under this Agreement without
Delphi's approval or consent as an indemnitor under the Indemnity
Agreement.
3. Notwithstanding anything to the contrary in this Agreement or any
other agreement between (a) the UAW and GM or (b) the UAW and Delphi,
in the event that the Benefit Guarantee expires as described in
Section F-2, and the Effective Date (as defined in the Benefit
Guarantee Term Sheet (Attachment B)) has not occurred, and Delphi has
unilaterally modified, terminated or in any way reduced or diminished
any of the benefits covered by the Benefit Guarantee, the
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<PAGE>
UAW shall be immediately released from any obligations to refrain from
striking and shall be allowed to call a strike against Delphi and/or
GM on two days written notice. This limited right to strike will
terminate on the Effective Date of Attachment B or as provided in a
substitute agreement between the UAW, Delphi and GM.
G. INTENTIONALLY OMITTED
H. OTHER NATIONAL AND LOCAL AGREEMENT MODIFICATIONS
1. Hiring requirements
The UAW and Delphi agree that all existing and future hiring
obligations and all such provisions contained in the Existing
Agreements as defined below in Section 7 are eliminated.
2. Transfer of Pension Assets and Liabilities - (414)(l)
A transfer of pension assets and liabilities will occur as provided in
the Term Sheet pursuant to Internal Revenue Code Section (414)(l).
3. Existing CHR/Legal Services
The Parties agree as follows:
a. As of October 1, 2007, all Delphi funding and participation in
the Legal Services Plan (Attachment I to the 2003 UAW-Delphi
National Agreement) and all programs associated with the UAW-GM
Center for Human Resources (CHR) will be terminated. Discussions
about any joint programs to be continued, and the method for
their administration at the local level in the absence of the
CHR, will be a matter of Local Negotiations.
b. CHR joint training fund accruals will be addressed as specified
in Section J, below.
c. The CHR/Joint Training Funds New Allocation Agreement dated April
2, 2001 is terminated as of the Effective Date of this Agreement.
d. Existing Legal Services fund (cash and accruals) will be reserved
for the exclusive use of eligible participants or to pay
administrative expenses incurred by the Plan until depleted. Any
excess (cash and accruals) will be addressed as specified in
Section J below.
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<PAGE>
4. Holiday Schedule
Delphi and the UAW agree to adopt the same specified holidays as
agreed to by General Motors and the UAW through September 14, 2011
(not including any paid Independence Week days except for the
specified Independence Day holiday itself).
5. Workers' Compensation Letter
The Workers' Compensation letter agreement attached to the 2003 Delphi
HRP will be subject to the same modifications that may be made to the
Workers' Compensation letter agreement in the 2003 UAW - GM National
Agreement as a result of 2007 National Negotiations between GM and the
UAW.
6. Temporary Employees
The UAW and Delphi agree that temporary employees may be used to
satisfy need-to-run requirements in plants that are considered "Wind
Downs", "Sell" and "Footprint". Temporary employees may be used in
"Keep" sites to bridge any difficulties arising from the
implementation of the attrition portion of this Agreement (Attachment
C). The use of temporary employees at any site for any reason is
subject to the approval of the UAW-Delphi National Parties.
7. Existing Agreements
The UAW and Delphi agree that the Supplemental Agreement, the
UAW-Delphi National Agreement dated September 18, 2003 and
supplemental agreements attached as Exhibits thereto and UAW-Delphi
Local Agreements (collectively the "Existing Agreements") are modified
or eliminated to conform to the provisions of this Agreement, as
listed in Attachment E.
8. Document 13
The UAW and Delphi agree that the Document 13 commitment in Article 2
of the Supplemental Agreement and Document 13 of the National
Agreement shall remain in effect through and expire on September 14,
2011, and that both are waived to the extent necessary to implement
the site plans outlined in Section B. and as described in detail in
Attachment A ("Site Plans").
9. Appendix L
The UAW and Delphi agree that the terms of the existing Appendix L
provisions of the 2003 UAW/Delphi National Agreement will be
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<PAGE>
applicable with the understanding that upon the conclusion of these
negotiations, the UAW-Delphi Joint National Sourcing Committee will
identify the proper variable wage and benefit cost elements to be
utilized in the Net Present Value Costing Methodology.
10. GIS
The UAW and Delphi agree that the Guaranteed Income Stream (GIS)
Program (Exhibit E to the 2003 UAW-Delphi National Agreement) will be
eliminated.
11. AOL
The UAW and Delphi agree that the Corporation-paid subsidy for AOL
will be discontinued.
I. EQUIVALENCE OF SACRIFICE
Delphi reaffirms its commitment to the principle of "equivalence of
sacrifice" when establishing compensation and benefit levels for salaried
employees and management, to ensure that sacrifices by UAW-represented
employees are reflected in the pay and benefit practices of all
non-represented employees.
Information provided by Delphi related to this matter will be in accordance
with the requirements of the Supplemental Agreement.
J. SETTLEMENT OF ALL EMPLOYEE, RETIREE, AND UNION ASSERTED AND UNASSERTED
CLAIMS
The Parties agree to the following in partial consideration for the UAW
entering into this Agreement and in consideration for the releases to be
provided pursuant to Section K.
1. Individual settlements pursuant to Transformation Program terms and
conditions.
2. The UAW has asserted a claim against Delphi in the amount of $450
million as a result of the modifications encompassed by this Agreement
and various other UAW agreements during the course of Delphi's
bankruptcy. Although Delphi has not acknowledged this claim, GM has
agreed to settle this claim by making a payment in the amount of $450
million, which the UAW has directed to be paid directly to the DC VEBA
established pursuant to the settlement agreement approved by
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<PAGE>
the court in the case of Int'l Union, UAW, et. al. v. General Motors
Corp., Civil Action No. 05-73991.
3. Delphi is current in its payment of Delphi-related CHR expenses and
Legal Services through year end 2006 and to date in 2007. In addition,
on October 1, 2007, the UAW will receive payment for an allowed claim
against Delphi in the amount of $140 million consisting of CHR
existing accruals of $134 million and UAW-Delphi Legal Services Plan
accruals of $6 million (adjusted by the difference between accruals
and expenditures until the effective date of the plan of
reorganization) in complete settlement of the UAW and the UAW-GM
Center for Human Resources claims asserted as to CHR Joint Funds and
the UAW-Delphi Legal Services Plan accruals and expenses. The amount
of $30 million will be directed to the UAW-GM Center for Human
Resources and the balance will be paid directly to the DC VEBA
established pursuant to the settlement agreement approved by the court
in the case of Int'l Union, UAW, et. al. v. General Motors Corp.,
Civil Action No. 05-73991.
4. Excludes waiver of rights to vested pension benefits, workers
compensation benefits, unemployment compensation benefits and
pursuance of pending ordinary course grievances of employees remaining
in the workforce.
5. All other consideration and concessions provided by GM and Delphi
under the terms of this Agreement and all attachments to this
Agreement.
The Parties also acknowledge that (i) the consideration provided by GM
pursuant to this Agreement and all attachments to this Agreement
constitutes a substantial contribution to Delphi's plan of reorganization,
(ii) this contribution is necessary to the success of Delphi's plan of
reorganization, and (iii) GM would not have made this contribution without
obtaining the waivers and releases provided for herein. The Parties further
acknowledge that nothing in the preceding sentence shall give rise to or
entitle GM to seek or be allowed any claim against or consideration from
any entity, including Delphi, other than as specifically approved by the
Bankruptcy Court as agreed to by Delphi and GM in a comprehensive
settlement agreement resolving the financial, commercial, and other matters
between them.
K. EFFECTIVE DATES AND BANKRUPTCY PROCEEDINGS
1. Subject to its terms and conditions, this Agreement is a final,
binding and conclusive commitment and agreement that will be effective
on the later of entry of an Order by the U.S. Bankruptcy Court
approving this Agreement that is satisfactory to the UAW, GM and
Delphi (the
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<PAGE>
"Approval Order"), or the first Monday following receipt by Delphi of
written notice of ratification from the UAW (the "Effective Date").
The ratification process will commence as soon as practical following
the date of this Agreement. In connection with Delphi's prosecution of
a motion to obtain entry of the Approval Order in the Bankruptcy
Court, (a) Delphi shall use its best efforts to file a motion for
approval of this Agreement in form and substance reasonably acceptable
to the Parties to be heard not later than the first monthly omnibus
hearing at which the motion can be considered under the case
management orders entered in the Bankruptcy Court, (b) Delphi shall
provide, to the extent reasonably practicable, both the UAW and GM
with copies of, and a reasonable opportunity to comment on, all
motions, applications, proposed orders, pleadings and supporting
papers prepared by Delphi for filing with the bankruptcy court
relating to court approval of this Agreement, and (c) the Parties
shall support the approval of this Agreement in the Bankruptcy Court
without condition, qualification or exception.
2. The parties acknowledge that the following provisions of this
Agreement will not become effective until all of the following events
have occurred and as of the date when the last of such events shall
have occurred: (a) execution by Delphi and GM of a comprehensive
settlement agreement resolving the financial, commercial, and other
matters between them and (b) the substantial consummation of a plan of
reorganization proposed by Delphi in its chapter 11 cases and
confirmed by the Bankruptcy Court which incorporates, approves and is
consistent with all of the terms of this Agreement and the
comprehensive settlement agreement between Delphi and GM:
a. The Benefit Guarantee Term Sheet (Attachment B)
b. Delphi pension freeze (Section F and Attachment B)
c. Cessation of Delphi OPEB (Section F and Attachment B)
d. 414(l) transfer (Section H.2 and Attachment B)
e. Section J.2.
3. The Parties agree that the order of the Bankruptcy Court approving
this Agreement shall provide that any plan of reorganization
consistent with this Agreement and any confirmation order entered into
with respect to such plan shall include the following provisions:
a) On the effective date of such plan of reorganization, the UAW,
all employees and former employees of Delphi represented or
formerly represented by the UAW, and all persons or entities with
claims derived from or related to any relationship with such
employees or former employees of Delphi, waive and release and be
deemed to have waived and released any and all claims of any
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<PAGE>
nature, whether liquidated, unliquidated, contingent,
non-contingent, asserted or unasserted, existing and/or arising
in the future against Delphi, its subsidiaries or affiliates, the
Delphi HRP, the Delphi Health Care Program for Hourly Employees
and the Delphi Life and Disability Benefits Program for Hourly
Employees, GM, its subsidiaries or affiliates, the GM HRP, the GM
Health Care Program for Hourly Employees and the GM Life and
Disability Benefits Program for Hourly Employees, and the
officers, directors, employees, fiduciaries, and agents of each,
arising directly or indirectly from or in any way related to any
obligations under the collective bargaining agreements between
Delphi and the UAW and between GM and the UAW related to such
employees and the UAW-GM-Delphi Memorandum of Understanding
Benefit Plan Treatment related to such employees (provided,
however, that claims for benefits provided for or explicitly not
waived under the provisions of this Agreement are not waived).
b) A plan exculpation and release provision (which provision shall
be at least as comprehensive as the plan exculpation and release
provision under the plan of reorganization for the debtor) for
the UAW released parties (which shall include the UAW and each of
their current or former members, officers, committee members,
employees, advisors, attorneys, accountants, investment bankers,
consultants, agents and other representatives) with respect to
any liability such person or entity may have in connection with
or related to the Delphi bankruptcy cases, the formulation,
preparation, negotiation, dissemination, implementation,
administration, confirmation or consummation of any of the plan
of reorganization, the disclosure statement concerning the plan
of reorganization, this Agreement or the Agreements on Attachment
E hereto or any contract, employee benefit plan, instrument,
release or other agreement or document created, modified, amended
or entered into in connection with either the plan of
reorganization or any agreement between the UAW or Delphi, or any
other act taken or omitted to be taken consistent with this
Agreement in connection with the Delphi bankruptcy.
c) This Agreement and the agreements referenced in Attachment E
shall be assumed under 11 U.S.C. Section 365.
4. The Parties agree that they will cause the UAW-GM Center for Human
Resources to enter into a consent order in the Bankruptcy Court
agreeing to the treatment of the CHR claim provided for in Section J
of this Agreement.
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5. Nothing contained herein shall constitute an assumption of any
agreement described herein, including, without limitation any
collective bargaining agreement between the UAW and Delphi (except as
provided for in Section K.3) or any commercial agreement between GM
and Delphi, nor shall anything herein be deemed to create an
administrative or priority claim with respect to GM or convert a
prepetition claim into a postpetition claim or an administrative
expense with respect to any party. The Parties further agree (and the
Bankruptcy Court order shall also provide) that this Agreement is
without prejudice to any interested party (including the parties to
this Agreement and the statutory committees) in all other aspects of
Delphi's Chapter 11 cases and that each Party to this Agreement
reserves all rights not expressly waived herein.
6. Unless this Agreement is consummated following all required approvals,
nothing herein shall bind any of the Parties nor shall the Agreement
be admissible in any judicial or other proceeding on behalf of or
against any Party.
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The parties, by their duly authorized officers and representatives, agree
accordingly this 22nd day of June 2007.
International Union, UAW Delphi Corporation General Motors Corporation
________________________ __________________ __________________________
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________________________ __________________ __________________________
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________________________ __________________ __________________________
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________________________ __________________ __________________________
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________________________ __________________ __________________________
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ATTACHMENT A
SITE PLANS
OVERVIEW
- The following site documents describe GM's and Delphi's product
program commitments to the sites (Keep, Sell and Footprint). At the
Sell Sites, the Parties understand that the new owners' involvement
and perspective will be needed as part of the process.
- General Motors will suspend all Sourcing on current products and new
products (identified in Attachment A-1) at the Keep, Sell and
Footprint Sites (after their transformation) for the life cycles of
the identified engine programs, vehicle programs, warehousing,
unitizing, trucking-related and component manufacturing.
- Program name changes will not alter the commitments made for the Keep
Sell and Footprint Sites in this document. In the event a product
program identified in Attachment A-1 is cancelled, discussions will be
held between General Motors, Delphi and the UAW to find alternative
solutions.
- Grand Rapids, Kokomo, Rochester and Lockport (the "Keep" Sites) will
retain all current parts, including their current respective
percentage of the total volume, through the life cycles of the
identified engine and vehicle programs which they supply to General
Motors.
- General Motors will award new work to the Keep Sites as identified in
Attachment A-1, and Delphi will produce the associated products at the
Keep Sites.
- Delphi will suspend all Sourcing relative to the above referenced
current product programs manufactured for GM at the Keep sites, as
well as the new products identified in Attachment A-1, through the
life cycles of the engine and vehicle programs associated with these
commodities. If a component in the above program awards causes the
product to become uncompetitive, the local parties will meet to
resolve the problem. If the local parties cannot reach resolution, the
National Parties will provide assistance. If the parties are still
unable to reach resolution, Appendix L will be utilized.
- A few GM products are dual sourced. If future volume reductions occur
at the Keep, Sell and Footprint sites, GM and/or Delphi will maintain
the previously identified volume percentage at the impacted locations.
- Revenue and jobs as identified in this document (including Attachment
A-1) are based on current estimates of program volumes which are
subject to change based on future market conditions and are not
financial or volume guarantees.
- Investment and engineering figures are estimates based on the current
understanding of program requirements which are subject to change
based on future program revisions, and are not financial or volume
guarantees.
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GRAND RAPIDS
CURRENT STATE
- Booked revenue projected to increase from $174 million in 2007 to $195
million in 2011 (reference Attachment A-1).
GM COMMITMENT
- GM will award the new product programs starting in 2010-2012,
including Cylinder Deactivation, Lash Adjusters, Lifter Guide
Assemblies, and the 4.5 HO V-8 12mm HLA. GM will commit these product
programs (for specific program details see the charts included in
Attachment A-1), with the potential for additional new product
programs as they are released. The majority of the specific program
replacement for incumbent work is beyond the GM program planning
horizon at this time.
DELPHI COMMITMENT
- Engineering and capital investment of approximately $22.5 million will
be made by Delphi at the Grand Rapids facility as required to support
the above-designated product programs.
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<PAGE>
ROCHESTER
CURRENT STATE
- Booked revenue projected to decrease from $583 million in 2007 to $343
million in 2011 (reference Attachment A-1).
GM COMMITMENT
- GM will award the new product programs for Fuel Rails, IAFM's & IAM's,
SIDI, LOMA and Canisters (Note: E85 injectors are included as part of
the Fuel Rails/SIDI system). GM will commit these product programs
(for specific program details see the charts included in Attachment
A-1), with the potential for additional new product programs as they
are released.
- The most significant programs for the site are the GMPT SIDI
programs for the next generation (Gen V) engines.
- GM has confirmed that Delphi has demonstrated the technical
capability to satisfy product requirements and compete for SIDI
programs as future applications are identified.
DELPHI COMMITMENT
- Engineering and capital investment of approximately $134 million will
be made by Delphi at the Rochester facility as required to support the
Gen V SIDI program.
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LOCKPORT
CURRENT STATE
- Booked revenue projected to decline from $753 million in 2007 to $457
million in 2011 (reference Attachment A-1).
GM COMMITMENT
- GM will award the new product programs for a variety of HVAC and
Powertrain Cooling (PTC) products. GM is committing these product
programs (for specific program details see the charts included in
Attachment A-1), with the potential for additional product programs as
they are released.
- The most significant future programs for the site are a large portion
of the C3XX HVAC and PTC products.
DELPHI COMMITMENT
- Engineering and capital investment of approximately $48 million will
be made by Delphi at the Lockport facility as required to support the
C3XX HVAC/PTC product programs.
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KOKOMO
CURRENT STATE
- Booked revenue projected to decline from $666 million in 2007 to $310
million in 2012 (reference Attachment A-1).
GM COMMITMENT
- GM will award the new product programs for a variety of powertrain and
electronics related products. GM is committing these product programs
(for specific program details see the charts included in Attachment
A-1), with the potential for additional product programs as they are
released.
- The most significant future product programs for the site are:
- Gen V SIDI Engine Controllers.
- TEHCM Controllers (T-90, T-76).
- GM BAS+ APM/BPIM (electronics & system assembly).
- Crash sensing SDM.
- Note: Delphi will relocate ECM/BCM from Milwaukee to Kokomo per
the timing in the transition plan shared with the Union June 15,
2007.
- The basis of competition for manufacturing this electronics product
line is generally dominated by low-cost non-U.S. manufacturers
(favorable packing density logistics). Therefore, it is critical for
the future of the site that the parties work together to address this
competitive challenge, including evaluation of ongoing wafer
fabrication operations.
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SANDUSKY
GENERAL
- Intent of all parties is to complete sale as soon as possible, but in
any event by the end of 2008.
- Objective is to accomplish a sale of the Sandusky operation to a new
owner who is committed to bearing manufacturing as an on-going
business.
- The below defined commitments from GM and Delphi are contingent upon
this business being sold to an acceptable buyer.
- Investment of an estimated $40 million in engineering and capital will
be required to support the various Gen III Bearing programs.
- If the sale of the Sandusky site is not concluded by December 31,
2008, GM will cause the Sandusky operations to be transferred as set
forth in Section B.2 of this Memorandum of Understanding.
GM COMMITMENT
- Support the sale of the business.
- Provide/award a book of business for extended period of time.
- GM has agreed to award new programs with annual volume
estimated at approximately 6.0 million bearings, for product
programs as follows:
- N.A. Delta fronts and rears.
- Theta Epsilon, Zeta.
- N.A. Epsilon, Theta.
- GM has issued purchase orders for five years subject to the above
stated conditions, i.e. a sale or transfer to a third party.
- GM has confirmed that Sandusky has demonstrated the technical
capability to satisfy product requirements and compete for bearing
program opportunities as future applications are identified.
DELPHI COMMITMENT
- Support the sale of the business.
- Agree to asset sale as appropriate to support sale of Sandusky.
- Support hourly workforce transformation.
- Support the transition of technical expertise and resources.
- Until the business is sold, or December 31, 2008, whichever is sooner,
Delphi will operate the facility.
UAW COMMITMENT
- Waive Document 13 of the National Agreement to the extent necessary to
complete the sale/transformation.
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ADRIAN
GENERAL
- Intent of all parties is to complete the divestiture as soon as
possible and in any event by end of 2007.
- Objective is to accomplish a transfer of operations to a new owner as
an on-going business.
- If the sale of the Adrian site is not concluded by December 31, 2008,
GM will cause the Adrian operations to be transferred as set forth in
Section B.2 of this Memorandum of Understanding.
- GM will not impede the future site owner's efforts to attract non-GM
business.
GM COMMITMENT
- Support the sale of the business.
- Provide/award a book of business for extended period of time.
- Negotiate long-term supply agreement with buyer.
- GM will commit to similar levels of content for the C3XX instrument
panel components as Adrian currently produces for the GMT 900 program.
DELPHI COMMITMENT
- Support the sale of the business.
- Agree to sale of assets as appropriate to support sale of the
business.
- Support hourly workforce transformation.
- Support the transition of technical expertise and resources.
- Until the business is sold, or December 31, 2008, whichever is sooner,
Delphi will operate the facility.
UAW COMMITMENT
- Waive Document 13 of the National Agreement to the extent necessary to
complete the sale/transformation.
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SAGINAW STEERING - SAGINAW
GENERAL
- Intent of all parties is to complete the divestiture as soon as
possible and in any event by end of 2007.
- Objective is to accomplish a transfer of operations to a new owner as
an on-going business.
- If the sale of the Saginaw site is not concluded by December 31, 2010,
GM will cause the Saginaw operations to be transferred as set forth in
Section B.2 of this Memorandum of Understanding.
GM COMMITMENT
- Support the sale of the business.
- Provide/award a book of business for extended period of time.
- Negotiate long-term supply agreement with buyer.
- GM will commit to product programs as described in Attachment A-1.
These programs will remain in the Saginaw, Michigan site for the
duration of the product life cycle.
- GM agrees to award to Saginaw, Michigan the C3XX front half shafts,
rack & pinion gear, integral gear, steering columns and (if technical
capability is demonstrated to GM Engineering satisfaction) steering
pumps and rear half shafts.
- Based upon future product applications for the Electronic Power
Steering (EPS), GM will award the C3XX EPS to the Saginaw, Michigan
site if the technical and engineering capability of the organization
is demonstrated to GM Engineering.
- In the event that it is determined that the technical specifications
cannot be met, GM, the Company and the UAW will initiate discussions
so that alternative job opportunities for future available product
programs are identified that are within the technical capabilities of
the Company.
DELPHI COMMITMENT
- Support the sale of the business.
- Agree to sale of assets as appropriate to support sale of the
business.
- Support hourly workforce transformation.
- Support the transition of technical expertise and resources.
- Until the business is sold, or December 31, 2010, whichever is sooner,
Delphi will operate the facility.
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<PAGE>
UAW COMMITMENT
- Waive Document 13 of the National Agreement to the extent necessary to
complete the sale/transformation.
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<PAGE>
SAGINAW MFG. NEWCO
GENERAL
- Intent of all parties is to complete transfer as soon as possible.
- Objective is to maintain presence in Saginaw County area
- Objective is to create a successful on-going business entity, operated
by a third party, and provide jobs
- If the transfer of the Saginaw Manufacturing site is not concluded by
December 31, 2008, the operations will be handled in accordance with
Section B.3 of this Memorandum of Understanding.
GM COMMITMENT
- GM will award new product programs as outlined in Attachment A-1,
which includes brake corner machining and brake corner assembly.
- Grant Newco a ROLR for next generation replacement programs or next
generation value-added assembly (VAA) opportunities as they are
identified through the GM Product Development Process for the programs
described above.
- GM will fund engineering design and development and start-up costs for
Newco to enable a competitive piece price environment for long-term
viability.
- The job opportunities described above will provide an initial
commitment of 500 jobs.
DELPHI COMMITMENT
- Support the transfer of the business.
- Agree to sale of assets as appropriate for transfer of Saginaw Mfg.
- Agree to support the transfer of work to the Saginaw area from other
Delphi sites providing acceptable commercial terms and conditions can
be reached between the parties (GM and Delphi).
- Consider facility lease proposals as appropriate with respect to the
transfer process.
- Support transfer of hourly workforce.
- Until the transfer of the business is complete, or December 31, 2008,
whichever is sooner, Delphi will operate the facility.
UAW COMMITMENT
- Waive Document 13 of the National Agreement to the extent necessary to
implement the plan.
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<PAGE>
FLINT - EAST
GENERAL
- Objective is to maintain presence in Flint area.
- Objective over time is to bring new work into the area operated by a
third party as an ongoing business entity and provide jobs as existing
legacy work exits from the Flint-East site without successor program
replacement.
- After December 31, 2008, Delphi will no longer have ongoing
responsibility for the hourly employees, but will continue to own,
operate and support the site through the end of current OE production
at the site.
- After December 31, 2008, all remaining hourly employees will be
handled in accordance with Section B.3 of this Memorandum of
Understanding.
- Employees who become redundant after October 1, 2007 and prior to new
work being available to the site, will be transferred to a third party
and placed on layoff and, if eligible, will be paid unemployment
benefits and applicable SUB.
GM COMMITMENT
- GM will develop and implement a unitizing facility (or facilities) in
the Flint area (to be named later) to be represented by Local 651 by
transitioning certain work beginning January, 2008 that is currently
contracted to third party packagers (230 jobs). This work will be
staffed by current employees represented by Local 651, who will become
GM employees at the wage and benefit levels as contained within the
modified UAW-Delphi Supplemental Agreement. Any issues, administrative
details or the application of the modified Supplemental Agreement will
be resolved by GM and the GM Department of the International Union,
UAW. This work is anticipated to be fully transitioned by July, 2008
and will remain through January 1, 2015.
- In addition, GM is prepared to commit this business on new and
replacement service parts, not unitized by suppliers, for unitizing
awards through the 2011 model year.
- GM also commits to provide 220 "trucking-related" jobs with ramp-up
timing beginning no later than the fall of 2007 with the commitment
level attained by July 2008. Local 651 employees will be able to make
application for these "trucking-related" jobs in conjunction with the
selection process managed by Local 659 and the Company responsible for
the "trucking-related" jobs.
- GM also commits to identify 550 additional job opportunities for Local
651, in addition to the work described above to provide 1,000 total
jobs upon full implementation. In the event that a sufficient number
of job opportunities are not identified by July 1, 2008, GM will
allocate the C3XX cluster to replace the existing GMT 900 cluster
work. GM will also identify
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<PAGE>
additional replacement work to be placed in Flint - East to attain the
committed employment level of 1,000 jobs by July 1, 2008.
DELPHI COMMITMENT
- Support hourly workforce transformation.
- Provide approximately 350 instrument cluster jobs at the Flint - East
site until the end of their respective program life cycles and/or in
accordance with the transition plan.
- Additionally Delphi will support an initial complement of
approximately 150 jobs related to GM service MRA's through the end of
current OE cluster production.
UAW COMMITMENT
- Waive Document 13 of the National Agreement to the extent necessary to
implement the transformation plan.
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<PAGE>
NEEDMORE RD.
GENERAL
- Objective is to maintain presence in Dayton area.
- Objective over time is to bring new work into the area as an on-going
business entity and provide jobs.
- If the transfer of the Needmore Rd. site employees has not been
completed within 30 days following the end of OE production (currently
scheduled for June 30, 2008), or December 31, 2008, whichever is
sooner, the employees will be transferred in accordance with Section
B.3 of this Memorandum of Understanding.
- Employees who become redundant prior to new work being available to
the site, will be transferred to a third party and placed on layoff
and, if eligible, will be paid unemployment benefits and applicable
SUB.
GM COMMITMENT
- GM will develop and implement a warehousing facility (or facilities)
in the Dayton area (location to be named later) to be represented by
Local 696 by transitioning certain work beginning July, 2008 that is
currently contracted to third party logistics providers (160 jobs).
These employees will become GM employees at the wage and benefit
levels as contained within the modified UAW-Delphi Supplemental
Agreement. Any issues, administrative details or the application of
the modified Supplemental Agreement will be resolved by GM and the GM
Department of the International Union, UAW. This work is anticipated
to be fully transitioned by March, 2009, and will remain through
January 1, 2015.
- As new vehicle programs are launched, GM will commit service parts
warehousing work for these vehicles through the 2011 model year.
- GM also commits to provide 140 "trucking-related" jobs with ramp-up
timing beginning on or about September, 2008, with the commitment
level attained by March, 2009.
- GM will transition IPC/CKD services from a current third party
supplier, which currently employs approximately 250 employees
beginning in July, 2008 with the commitment level attained by January,
2009.
- GM also commits, by March, 2008, to identify 200 additional job
opportunities for Local 696, in addition to the work described above
to provide 750 total jobs upon full implementation.
DELPHI COMMITMENT
- Support the transfer of the hourly workforce.
- Delphi will manage the current existing programs through the end of
production, or December 31, 2008, whichever is sooner.
- Until the transfer of the employees is complete, or December 31, 2008,
whichever is sooner, Delphi will operate the facility.
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<PAGE>
UAW COMMITMENT
- Waive Document 13 of the National Agreement to the extent necessary to
implement the transformation plan.
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<PAGE>
COTTONDALE
GENERAL
- Intent of all parties is to complete the divestiture as soon as
possible and in any event by end of 2007.
- Objective is to accomplish a transfer of operations to a new owner as
an on-going business.
CURRENT STATE
- Booked revenue projected to decline from $324.7 million in 2007 to
$101.5 million in 2011 (reference attached documents).
- New work opportunities at the Mercedes assembly plant include future
cockpit programs (W-166, X-166 and W-251 NG). This new business
represents an annual revenue stream of approximately $320 million.
Winning this new business will be dependent upon the plant's ability
to satisfy Mercedes' requirements in the areas of quality, technology
and cost.
- The basis of competition for assembly of this product is generally
dominated by low-cost U.S.-based assemblers. Therefore, it is critical
for the future of the plant that the parties work together to address
this ongoing competitive challenge.
DELPHI COMMITMENT
- Support the sale of the business.
- Agree to sale of assets as appropriate to support sale the business.
- Support hourly workforce transformation.
- Support the transition of technical expertise and resources.
UAW COMMITMENT
- Waive Document 13 of the National Agreement to the extent necessary to
complete the sale/transformation.
- Work with the new buyer to develop a competitive agreement that will
support the plant in winning new business.
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<PAGE>
ATTACHMENT A-1
UAW Site Revenue & Headcount Projections
Attached Separately
Page 41 of 46
<PAGE>
ATTACHMENT B
Term Sheet - Delphi Pension Freeze and Cessation of OPEB, and GM Consensual
Triggering of Benefit Guarantee"
Attached Separately
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<PAGE>
ATTACHMENT C
Special Attrition Plan
Attached Separately
Page 43 of 46
<PAGE>
ATTACHMENT D
COMPETITIVE OPERATING AGREEMENT FRAMEWORK
Local Negotiations
(DELPHI LOGO) Competitive Operating Agreement Framework
TO IMPROVE PLANT COMPETITIVENESS, PROMOTE OPERATING VIABILITY AND BETTER
POSITION THE PLANTS TO WIN NEW BUSINESS, THE FOLLOWING REPRESENTS DELPHI'S AND
GM'S VIEW OF CRITICAL ELEMENTS FOR DISCUSSION DURING LOCAL NEGOTIATIONS AT ALL
KEEP, SELL AND FOOTPRINT SITES.
- Process
- Commence local negotiations at all Keep, Sell and Footprint Issue
sites as promptly following ratification
- Conclude local COA negotiations within 60 days following
ratification
- Wages and benefits not included in Local Negotiations
- Top Priority Local COA Issues:
- Effective utilization of workforce capabilities to achieve
competitive direct to indirect ratios
- Elimination of uncompetitive activities (direct and
indirect): outsource/subcontract as required
- Flexibility to use skilled trades efficiently, focusing on direct
support of production operations
- Reduce skilled trades classifications (ultimately to
Electrical, Mechanical)
- No restrictions on combination of jobs or "right of
access" (eliminate LODs)
- Operate production equipment as required
- Flexibility to use production employees efficiently
- Reduce production classifications to a minimum
- No restrictions on combination of jobs
- Enhancing production employee skills and utilizing them
to their fullest capabilities (maintenance of
tooling/equipment, changeovers, etc.)
- Reduce employee movement to protect quality of product and
operating efficiencies
- Overtime
- Resolve uncompetitive skilled trades Full Utilization
restrictions
- Simplify scheduling and equalization administration
- Attendance
- Implement a local No Fault Attendance Program
- FMLA Administration as allowed by law
- Eliminate prior agreements and practices that generate unnecessary
operating costs
- The local parties will not be constrained in achieving a COA by existing
agreements/past practices
Delphi Confidential - Subject to Protective Order Industrial Relations
Page 44 of 46
<PAGE>
ATTACHMENT E
List of Agreements
Attached Separately
Page 45 of 46
<PAGE>
ATTACHMENT F
ILLUSTRATIVE EXAMPLE OF WAGE PROGRESSION SCALES
GROUP A HIRE DATE
--------------------------------------------
7/1/05 8/1/06 10/1/06 11/1/06 2/1/07
------ ------ ------- ------- ------
Initial Base 14.00 14.00 14.00 14.00 14.00
6 Mth Progression #1 14.42 14.42 14.42 14.42 --
6 Mth Progression #2 14.85 -- -- -- --
6 Mth Progression #3 15.30 -- -- -- --
Base As Of June 30, 2007 15.30 14.42 14.42 14.42 14.00
Incremental Next Wage Progression 0.46 0.43 0.43 0.43 0.42
-------------------------------------------
Revised Base 15.76 14.85 14.85 14.85 14.42
December 30, 2007 Incr. Conversion To Floor 0.47 1.38 1.38 1.38 1.81
Wages As Of December 30, 2007 16.23 16.23 16.23 16.23 16.23
January 2008 Base With Accrued COLA 16.23 16.23 16.23 16.23 16.23
Multiplied By Wage Formula %, Greater Of CPI-W / Mfg. Sector Earnings Change
Equals --------------------------------------------
Revised January Base
============================================
GROUP B HIRE DATE
--------------------------------------------
7/1/05 8/1/06 10/1/06 11/1/06 2/1/07
------ ------ ------- ------- ------
Initial Base 14.00 14.00 14.00 14.00 14.00
6 Mth Progression #1 14.42 14.42 14.42 14.42 --
6 Mth Progression #2 14.85 -- -- -- --
6 Mth Progression #3 15.30 -- -- -- --
Base As Of June 30, 2007 15.30 14.42 14.42 14.42 14.00
Incremental Next Wage Progression -- 0.43 0.43 0.43 0.42
-------------------------------------------
Revised Base 15.30 14.85 14.85 14.85 14.42
December 30, 2007 Incr. Conversion To Floor -- 0.45 0.45 0.45 0.88
Wages As Of December 30, 2007 15.30 15.30 15.30 15.30 15.30
January 2008 Base With Accrued COLA 15.30 15.30 15.30 15.30 15.30
Multiplied By Wage Formula %, Greater Of CPI-W / Mfg. Sector Earnings Change
Equals --------------------------------------------
Revised January Base
============================================
GROUP C HIRE DATE
--------------------------------------------
7/1/05 8/1/06 10/1/06 11/1/06 2/1/07
------ ------ ------- ------- ------
Initial Base 14.00 14.00 14.00 14.00 14.00
6 Mth Progression #1 14.42 14.42 14.42 14.42 --
6 Mth Progression #2 14.50 -- -- -- --
6 Mth Progression #3 14.50 -- -- -- --
Base As Of June 30, 2007 14.50 14.42 14.42 14.42 14.00
Incremental Next Wage Progression -- 0.08 0.08 0.08 0.42
-------------------------------------------
Revised Base 14.50 14.50 14.50 14.50 14.42
December 30, 2007 Incr. Conversion To Floor -- -- -- -- 0.08
Wages As Of December 30, 2007 14.50 14.50 14.50 14.50 14.50
January 2008 Base With Accrued COLA 14.50 14.50 14.50 14.50 14.50
Multiplied By Wage Formula %, Greater Of CPI-W / Mfg. Sector Earnings Change
Equals --------------------------------------------
Revised January Base
============================================
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