Delphi May Turn Over Cadiz Plant to Workers

Delphi May Turn Over Cadiz Plant to Workers Delphi Automotive has reportedly offered to turn over 75% of the plant and equipment from its Puerto Real plant in Cadiz, Spain to the workers. Delphi, operating under Chapter 11 bankruptcy, announced it would close Puerto Real due to prolonged losses and an uncompetitive cost structure. The effort has gone massively wrong for Delphi, sparking walkouts, strikes, civil unrest, political involvement up to the prime minister, and even infighting among Spain's strong labor movement, seeking to lay blame for the region's depressed economic state. Delphi Puerto Real manufactures bearings and steering and suspension components; after continued losses, it was marked for closure. Also, Delphi has classified several product categories as "non-core," going forward following bankruptcy; the bearings and steering system components manufactured in Puerto Real among them. Plants producing non-core products are subject to sale or closing, in line with the reorganization plan. Approximately 1,600 workers are being laid off, but many claim the ultimate impact is closer to 5,000 when the impact on supplier and other dependent businesses are taken into account. The Cadiz and Andalusia region has an unemployment rate over 14%, Spain's third-highest. A few days ago, Spain's prime minister, Jose Luis Rodriguez Zapatero, met with workers and pledged the state would make every effort to ensure the 1,600 workers would find employment. He repeated a promise that an unnamed group of four companies is on the verge of investing in Puerto Real's manufacturing base and/or the Delphi plant would be taken over and pick up the workers. According to separate sources, the four new companies likely include Ficosa, Gonzalez Byass and Sadiel. If Delphi is walking away from an operating plant and handing the keys over to activist workers, it seems to represent an astonishing victory for a grassroots popular opposition effort. It is also an "unprecedented" move, a company giving up hope of closing the plant in anything resembling a normal fashion. For that, the various trade unions are jostling to take credit, including the workers union and the powerful Socialist, Stalinist, and Communist unions. Should a 75% assets handover occur, there are other problems to consider. When the closing announcement was made, many customers cancelled and/or accelerated orders to close out existing contracts, leaving little or no long-term business in place. Raw materials are also in short supply. Most recently, negotiations between the company and Puerto Real workers have ground to a halt. Delphi is declining to hand over patents or licensing for the parts produced in Puerto Real, and will not turn over the customer list. Workers point out that without access to these assets, the other 75% plant and equipment assets being offered are essentially worthless. The plant currently stands idle from strikes and work stoppages. Its closing plan has been accepted by the local courts, although the local government is working to oppose the plan. Workers are due to be paid for June and a final lump sum in July.