March 29 (Bloomberg) -- Delphi Corp.'s latest offer on wages and benefits was rejected by the United Auto Workers union, which said the bankrupt auto-parts maker will seek court permission to scrap its existing contract.

Delphi's March 24 proposal ``wasn't even close'' to something union leaders could submit to rank-and-file workers for a ratification vote, said Paul Krell, a UAW spokesman. Delphi has told union representatives that he will file a motion March 31 asking for court permission to void labor contracts, UAW Vice President Richard Shoemaker said on the organization's Web site.

The union has threatened to strike should Delphi unilaterally impose new contract terms. A walk out also could shut down General Motors Corp., which relies on Troy, Michigan- based Delphi for auto parts, and push GM toward bankruptcy.

``We're in discussions with the UAW and we will continue those discussions in hopes of reaching an agreement,'' Lindsey Williams, a Delphi spokesman, said earlier today. He declined to comment on the union's statement.

Delphi Chief Executive Officer Steve Miller will file the motions at 9:30 a.m. local time, Shoemaker's message said.

The union's leadership hasn't ``been advised of this by any Delphi representatives,'' Shoemaker said. ``We have no reason not to believe those who provided us with this information.''

$50,000 Payment

In Delphi's latest labor proposal, UAW members were offered a payment of $50,000 each in exchange for a 35 percent pay cut, contingent on Detroit-based GM, Delphi's former parent company, agreeing to absorb some of the cost. Wages for long-time Delphi employees would fall to as low as $12 from the current $27.50 if GM doesn't help. Health-care benefits for retirees would be eliminated.

``The offer would be devastating to Delphi workers, their families and their communities,'' Krell said.

Under Delphi's proposal, hourly pay for Delphi workers who accept the $50,000 bonus would drop initially to $22 and then to $16.50 on Sept. 3, 2007. GM hasn't agreed to subsidize the supplier's wages, the proposal said.

GM's shares fell 60 cents, or 2.6 percent, to $22.15 at 4:16 p.m. in New York Stock Exchange composite trading. They have gained 14 percent this year on optimism that cost cuts and sales of new models will reduce losses. The stock dropped 52 percent in 2005 as GM's share of the U.S. market fell to its lowest since 1925.

The company's 8.375 percent note due in 2033 fell .5 cent on the dollar to 73.75 cents to yield 11.55 percent as of 4:40 p.m. New York time, according to Trace, the bond-price reporting service of the NASD.

Ruling

George Anthony, bargaining chairman of UAW Local 292 at a Delphi electrical components plant in Kokomo, Indiana, said it could take 45 to 60 days before a ruling on any Delphi motion.

Given that timetable, the decision could come just before or during a convention in which Ron Gettelfinger, 61, is seeking re- election as UAW president. During the convention, the union will also name a replacement for Shoemaker, 66, who is retiring.

Delphi's proposal would require workers to pay up to $3,000 a year for health care and eliminate a ``Jobs Bank'' program that pays laid-off employees when they aren't working.

It would also remove automatic wage increases to protect workers from inflation, abolish the union's right to strike, and take away restrictions against selling or closing factories and shipping work to outside suppliers.

GM offered buyouts of up to $140,000 to 113,000 hourly workers in the U.S. last week as part of a plan to eliminate 30,000 union jobs and close 12 North American locations by 2008.

If GM agrees to help Delphi, that company's workers would also be eligible for the buyout payments.

To contact the reporters on this story: John Lippert in Southfield, Michigan, at jlippert@bloomberg.net; Jeff Bennett in Southfield, Michigan, at jbennett17@bloomberg.net

Last Updated: March 29, 2006 18:52 EST