NEW YORK (CNNMoney.com) - Bankrupt auto parts maker Delphi is seeking permission to pay about $60 million in bonuses to its white-collar employees, at the same time it is trying to cut the pay of its union-represented workers by about 40 percent.

The request for performance bonuses to its 14,000 salaried staff was disclosed Wednesday in the middle of a three-day bankruptcy court hearing set to conclude Thursday.

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The company is in court seeking to get authority from bankruptcy judge Robert Drain to dump its contracts covering 33,000 unionized workers, saying those labor costs are not competitive. The unions are challenging that motion and threaten to strike if their contracts are voided. A strike could be a crippling blow to the prospects for embattled automaker General Motors (Research), which is already in negotiations with the unions and Delphi to find an agreement at its former parts unit.

Delphi (Research) said it hopes to reach a negotiated settlement with the union on the pay cuts and plant closings, rather than have them imposed in bankruptcy court. But the increased pay to executives could make it more difficult to win rank and file approval of any cut, and could lead to a strike or perhaps even a series of non-authorized "wildcat strikes" by union workers at Delphi.

The $60 million payments to the salaried staff comes in addition to the $36 million in performance bonuses that have already been approved for Delphi's top 500 executives. All the payments would be based upon the company's and individual executives' performance during the first half of 2005.

"There's never a good time when talking about incentive bonuses when you're restructuring," conceded Delphi spokeswoman Claudia Piccinin. Still she defended the pay proposals as justified by the current labor market, and by the fact that the company has not paid the performance bonuses since 2002.

"Our hourly work force is being paid above what competitors are paying. They've received increased compensation in recent years," said Delphi spokeswoman Claudia Piccinin. "By contrast our salaried work force is paid at or below our competitors. We've seen increased turnover of salaried staff since we filed for bankruptcy."

A GM spokesman had no comment on he Delphi plan. UAW officers did not make or release any statement on the latest Delphi bonus plan. Union spokesman Paul Krell said Thursday afternoon the union has been consistently opposed to such plans since Delphi filed for bankruptcy court protections on Oct. 8.

"We've consistently said they are inappropriate, unjustified and disgusting. We've filed motions that are very strongly opposed to them," Krell said.

But Krell would not comment on what impact the bonus plan might have on negotiations between the union and Delphi, or upon rank-and-file acceptance of any negotiated settlement that might be reached.

Industry observer Robert Farago, publisher of TheTruthAboutCars.com, said the lack of public statement by UAW leadership isn't necessarily good for Delphi-union relations.

"Maybe the leadership is playing nice, but it's a slap in the face for the rank and file," he said. "They've got to be furious. The silence of leadership does not bode well. It's like putting a lid on a pressure cooker."

A Delphi strike would almost certainly shut production at the North American plants of General Motors, which spun off Delphi into a separate company but still uses it as its primary supplier. Many experts believe a long shutdown at GM could force the embattled automaker to follow Delphi into bankruptcy court itself.

Shares of GM, which had seen almost a 30 percent gain since it reported better-than-expected first quarter results April 20, saw its shares down 4 percent in trading Thursday on reports about the Delphi pay plan.

Unlike the pay for top executives, the salaried staff's incentive bonus program does not need the bankruptcy court's approval, Piccinin said, because the company had made payments under the plan in previous years.

Piccinin said that the company would not need to be back in the black to pay the bonuses, only that it needs to trim losses before items such as depreciation, interest, taxes and restructuring costs to $80 million for the executives to get the payment. The company reported an operating loss of $608 million for the first six months of last year in its 10-Q report filed in August 2005.

Piccinin said improved results at Delphi has put the company on track to meet its goals and make the payments if current levels continue over the next two months.

Still Delphi officials argue that it can't compete long-term without a significant change in its labor cost structure.

It has been demanding that unionized workers cut their pay by 19 percent immediately to $22 an hour from $27 they are now paid. It also is demanding pay be cut to $16.50 an hour in September 2007, when the current labor deal is set to expire, although it would offer a $50,000 payment to workers next fall to get them to accept that final pay cut.

For more on what's at stake for GM in the Delphi-union battle, click here.