CHICAGO — The bankruptcy of Delphi Corp., the struggling auto parts giant spun off by General Motors, could be the first step in the unwinding of an American industrial tradition — the era of the privileged and protected blue-collar assembly-line worker.

If Delphi, which filed for Chapter 11 protection on Saturday, gets what it seeks in wage and benefit reductions from union members, the pay for members of the United Auto Workers could shrink to as little as $10 an hour from the current $27. Their benefits almost certainly would drop as well.

Those drastic cuts would come not only as a blow to thousands of Delphi workers, they also could set the pattern for negotiations between the union and the Big Three domestic automakers, which for years have struggled to find ways to lower their costs on the assembly line.

"In one fell swoop, U.S. auto workers are going from being solidly in the middle class to being part of the working poor by earning $10 an hour," said Harley Shaiken, a University of California-Berkeley labor expert.

The competitive issues bedeviling the auto industry are the same coursing through much of American manufacturing. In the era of globalization, in which nonunion Japanese car companies are entrenched in the United States and Chinese factories can produce goods at cheaper prices, the high cost structure of U.S. companies needs to come down.

GM refused to bail out Delphi, its biggest supplier, rolling the dice that Delphi will continue to provide parts during reorganization. GM is Delphi's biggest customer, accounting for nearly half its $28 billion sales.

Delphi, which lost $741 million in the first half, says it will close or sell several of its 45 North American plants and cut thousands of jobs as it restructures.

By not helping Delphi, GM is warning the union to brace for tough talks two years from now, when a UAW four-year contract ends, Burnham Securities analyst David Healy says.

"The Delphi action means negotiations on the 2007 contract with the UAW are under way," Healy said. "The union has to make concessions because GM can't keep losing money at the rate they are. The small print in the GM financial statements says that in 2004 its labor cost was $78 an hour with benefits."

GM lost $1.64 billion in the first half, with losses at its North American auto unit wiping out profits at GMAC.

Even if GM doesn't seek bankruptcy, the UAW faces growing pressure to give back big chunks of the wages and benefits it has won in the last 70 years to save U.S. jobs.

"The power of the union has been altered, and their negotiating power is gone," said David Cole, chairman of the Center for Automotive Research. "Their wages and benefits are now going to be defined by the bankruptcy judge, which basically means wages and benefits will be defined by the global market where if you aren't competitive, you have a problem."

UAW President Ron Gettelfinger, who Saturday described Delphi's filing as "an extremely bitter pill," had no additional comment yesterday.

The UAW said it has retained the New York law firm of Cohen, Weiss and Simon LLP to represent it in bankruptcy proceedings. The firm has represented the UAW before and airline and steel unions in bankruptcies.

GM has pressed the union since April to pay more out-of-pocket for healthcare and says it will cut 25,000 UAW jobs over the next three years, mainly through attrition.

Labor expert Shaiken said high productivity and low wages in countries such as Mexico and China are shaping wages in the United States, where auto workers in the future may not be able to afford the cars they build.

"It's a dramatic statement that the global economy is coming home," Shaiken said. "This may not be the end of the story. Eventually, they may ask them to match (wages in) China. This is essentially saying you've got to match global wage costs."

Jim Hossack, a vice president at forecaster AutoPacific, said for decades the automakers gave in to the UAW to avoid costly strikes, despite knowing that Judgment Day would come.

"It was die now or die later and they chose to die later — but later is here now," Hossack said.