Auto Service World
News   May 2, 2006   by Auto Service World

GM to Continue Getting Price Cuts from Embattled Delphi


Embattled parts supplier Delphi, has been unsuccessful in persuading GM brass to continue paying normal prices for their parts, according to a recent report filed with the SEC.
So, as of the next quarter, GM will go back to receiving price reductions from the Troy Michigan supplier.
According to the company, pricing and labour costs remain the largest stumbling blocks to restructuring efforts.
This set-back with their largest customer, means Delphi will have to make up the difference with its union negotiations, which, to date, have gone poorly at best.
“This does not change in any way our commitment to reaching a consensual agreement with Delphi,” GM spokesman Jerry Dubrowski said Monday. “We are working with Delphi and the unions to reach an agreement.”
Others in the industry however, see the lack of price guarantees being much more significant than either side is willing to publicly acknowledge.
“When you hear price guarantees, think wage subsidies,” said Robert Chiaravalli, a labor lawyer West Bloomfield. “If a company like Delphi or Visteon can’t get a certain price guarantee, then they probably can’t cover their wage costs.”
It is still believed however, that Delphi can use this most recent inability to settle with GM to its advantage, in its negotiations with the UAW.


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