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October 13, 2005

Delphi: New York's high business costs may close its New York operations

New York's high wages and labor costs are partly to blame for the current troubles of Delphi Corporation's Lockport Plant in Buffalo, Delphi’s CEO Robert S. Miller said at a press conference on Wednesday, October 12.

Miller told reporters that New York’s workers’ compensation rates add $3 per hour to the company’s labor costs.

“It’s a scandal in New York how costly it is,” Miller told Senator Hillary Clinton (D-NY), the Buffalo News reported. Miller told Senator Clinton that workers at the Lockport plant pay for the higher labor costs in New York by being paid less than counterparts elsewhere.

Miller’s comments stem from the company's ongoing efforts to negotiate lower labor costs with unions. Delphi is seeking permission to cut hourly wages by half in order to sustain the company and its pension plan, which benefits 12,000 retired workers.

“Wage changes would not come until the second quarter of 2006, after talks with the autoworkers and other unions,” according to the story in the Buffalo News. “Delphi has said that it is seeking wages as low as $10 to $12 an hour. Analysts expect the likely minimum to be about $14, the level to which the UAW agreed for new hires at Delphi.”

If no agreement has been reached by mid-December, Delphi will ask court permission to void labor contracts, the Buffalo News said.