Delphi files to void labor contracts

? After months of tough talk, Delphi Corp. on Friday stood by its words, saying it would slash thousand of jobs, close or sell off two-thirds of its U.S. plants and ask a bankruptcy court judge for permission to throw out its union contracts.

The move by the nation’s largest auto parts supplier raised the stakes in a five-month-old conflict that could have a far-reaching effect on the company, its 33,000 workers, its unions, the U.S. auto industry and Midwest communities.

Accusing Delphi of misusing the bankruptcy court process, the UAW promptly warned that a “long strike” would take place if Delphi sought to impose its latest offer. The union also said there was “no basis for continuing discussions” with the company.

While some experts said Delphi might be trying to jolt its unions into making a deal, others warned that the situation could easily backfire for all involved, including beleaguered General Motors Corp., which could end up in bankruptcy court itself if Delphi workers strike. Delphi is GM’s largest supplier, and there are deep financial ties between the two companies.

Robert S. “Steve” Miller, Delphi’s chairman and chief executive, described Friday’s actions, in a written statement, as “necessary procedural steps” that the firm had to take while continuing to try to reach agreement with its unions.

Three times before in recent months, Troy, Mich.-based Delphi had put off the threat to go to court in order to set aside its labor contracts. When the company filed for bankruptcy last fall, it warned it would take such steps if it could not lower its labor costs to allow it to compete with nonunion and foreign-based competitors.

Delphi is the world’s second-largest auto parts maker with more than 180,000 workers in 40 countries.