Members of the United Auto Workers union are voting today on a proposed contract with Delphi Corp. (OTC:DPHIQ), the spun-off supplier to General Motors (NYSE:GM), which includes a compensation package that would drop their hourly wage for employees with seniority by $10 or more. New hires already start at a much lower pay scale, and many older workers have already taken buyout offers.

The offer, a product of long and bitter negotiations, illustrates the bind U.S. manufacturers find themselves in attempting to compete with foreign sources. According to the U.S. Bureau of Labor Statistics, the hourly production worker in the U.S. averages $23.65, while those in Brazil work for $4.09, Mexico $2.63, Taiwan $6.38, and Poland $4.54. While the Bureau did not include costs for mainland China, which certainly undercuts even these low-cost providers.

Given the staggering difference in labor costs, even these concessions might not be enough to safeguard Delphi jobs. While the Union successfully fought to keep open more plants than Delphi wished to, the company still plans to sell or shutter a number of its locations.

Although this pact only applies to 17,000 Delphi employees, it is being watched carefully as a possible template for upcoming negotiations between the big three car makers and the UAW. Included in the offer were a number of benefits such as yearly bonuses to ease the transition to a more competitive wage structure. The agreement won't effect GM's estimated $7 billion obligation to Delphi and its employees, though.

The question is, are these concessions enough to buoy Delphi? Are the guarantees they give to the workers affordable? The line of dominoes stretches all the way from the Chinese laborer working for peanuts right up to GM stockholders, and knocking this one over is bound to cause others to tremble.