In today's filing, Delphi will offer a "transformation" plan that will considerably shrink the company. It's expected to detail its core lines of businesses and facilities. That means roughly 20 plants or facilities will be closed or sold, according to people familiar with the situation. Also, Delphi is expected to cut one-fourth of its salaried positions world-wide -- eliminating some 8,500 jobs.

For GM, the looming Delphi-UAW showdown complicates the already-difficult situation facing the auto maker and its embattled CEO, Mr. Wagoner. Losing market share -- it's below 25% in the U.S. now -- GM is reeling from a $10.6 billion loss last year and faces federal probes over its accounting. When GM spun off its Delphi parts business in 1999, GM hoped to create a self-sufficient supplier that could be robust enough to support its high-cost, unionized U.S. employees until they retired and were replaced by workers earning lower wages. But slumping sales and rising prices for commodities such as steel put the squeeze on Delphi, and now it's one of several big auto-parts makers operating in Chapter 11.

GM has pledged to support Delphi, including financing buyout offers to union workers that were agreed to earlier this month. But supporting Delphi could drain cash that GM badly needs to reinvigorate its product lines.

An inside look at the tumultuous talks shows how difficult it will be for Delphi, GM and UAW -- all in weaker conditions than ever before -- to rise above problems, politics and pressures to reach a landmark labor deal.

Mr. Miller, 64 years old, is used to playing hardball with employees, customers and creditors. The former Chrysler executive has turned around ailing giants from Waste Management to Bethlehem Steel. Delphi brought him in in July when its founding CEO retired.

Arriving at Delphi, Mr. Miller found a company hemorrhaging from high labor and other costs and the weakening of its key customer, GM. His first official, and very public, act was to tell the Detroit power structure that radical change was overdue if the traditional U.S. auto business was to survive. "Our labor contracts are simply unaffordable and must be changed," he told an industry conference at the Greenbrier Hotel in West Virginia on Oct. 7. Auto executives broke out in applause.

At a news briefing, Mr. Miller suggested outsourcing some current union jobs, such as noncore or seasonal work. "Paying $65 an hour for someone mowing the lawn at one of our plants is just not going to cut it in industrial America for long," he said. At a visit to a plant in Lockport, N.Y., soon after, he faced a sea of green T-shirts reading "Miller's Lawn-Care Service: Mowing Down Wages." Some workers turned their backs on him. Later that day, however, some workers at a Grand Rapids, Mich., plant told him they understood the need for change.

In early October he put Delphi into bankruptcy reorganization and asked the bankruptcy court for approval of bonuses for executives if Delphi made a successful turnaround. That further infuriated the union. The UAW called the request "obscene." The hate email and Internet postings upset his family, Mr. Miller told colleagues.

Delphi's first offer to the union was to drastically cut hourly wages, to $9.50 from $27. UAW President Ron Gettelfinger phoned Mr. Miller that day. The 61-year-old union official responded that the offer "isn't even worth discussing" and added, "I don't negotiate with a gun to my head," according to a person familiar with the matter.

Even Michigan's governor weighed in. Gov. Jennifer Granholm, a Democrat facing a re-election challenge, huddled with Mr. Miller in a private room at a Hyundai event on Oct. 13 and told him she'd like him to do something about Delphi's executive comp, according to a person familiar with the matter. The next Monday, Mr. Miller said he would cut his salary to $1 a year from $1.5 million. When he next showed up at a plant, workers' signs said "Miller isn't worth a buck."

Mr. Gettelfinger, a former Ford chassis repairman, got the impression that the Delphi chief's complaints about labor costs were partly a cry for help from Delphi's former parent GM, says a person familiar with the situation. GM, in spinning off Delphi, had agreed in principle to assume certain future risks and liabilities. But since Mr. Miller came aboard, GM had been sending signals that it wouldn't immediately rescue the parts supplier.

In October, the UAW threatened a strike. That gave Mr. Miller leverage against Mr. Wagoner because of the harm a Delphi strike would cause the auto maker. Mr. Miller successfully pressed Mr. Wagoner to rescind plans to impose cuts in what GM would pay Delphi for certain parts, according to people familiar with the discussions.

For the first time since the spinoff, GM agreed to provide financial support. It signaled it would help Delphi with the costs of any buyouts or early-retirement deals for workers that were negotiated. By doing so, GM stood to gain the cooperation of the union in GM-UAW talks over plans to shrink GM's work force.

Encouraged by GM's new posture, Mr. Miller told Mr. Gettelfinger at a Dec. 15 meeting, "Now's the time to deal," according to a person familiar with the talks. To show goodwill, he said he would "eat crow" by withdrawing the $9.50-an-hour wage offer that so angered the union, this person said.

As the sides made bits of progress behind the scenes, the UAW chief wouldn't even acknowledge talking to Mr. Miller. He told reporters at a media briefing he had "no relationship, no trust" with Delphi's leader.

Talks picked up speed early this year when GM named a new chief financial officer, Frederick "Fritz" Henderson. Mr. Miller also started to change his tune. At an industry gathering in January, he said Delphi's problems weren't the workers' fault. "We need a soft landing," he said.

That became all of the parties' mantra -- to decrease the harshness of the new reality by letting workers leave with some sort of buyout. Three-way talks focused on such a deal. But Delphi had set a Feb. 17 deadline for its court filing to void its labor contracts. On Feb. 13, Mr. Miller met Messrs. Gettelfinger and UAW Vice President Dick Shoemaker at UAW headquarters. "What can you say to me to convince my board and creditors' committee to delay our motion?" he asked, according to a person familiar with the meeting.

The union officials told him that going to court at that point would damage the goal of reaching an accord. So Delphi announced that it would delay until March 31 -- when, if a labor-cost agreement wasn't in place, it would seek bankruptcy-court authority to get out of its labor contracts.

This month, GM announced a sweeping plan to offer buyouts of from $35,000 to $140,000 to 131,000 UAW-represented GM and Delphi workers. GM will pay for the buyouts, and also agreed to take back 5,000 former GM workers who went with Delphi when it was spun off seven years ago.

Delphi, expected to run out of cash in the third quarter, is looking to GM for more help. GM has said that its liability for former GM workers employed at Delphi could eventually cost the car company $5.5 billion to $12 billion in all.

GM's own troubles make it difficult to fork over cash. GM is searching for other ways to assist, such as by helping Delphi sell unprofitable lines of business, according to Delphi and GM officials. For example, GM could provide a potential buyer with a guarantee of a certain volume of business, helping Delphi get a better price for units. One business Delphi is likely to exit from is making spark plugs. It costs Delphi $2.05 to make a plug, versus $1.05 in China. Delphi sells plugs at a loss to GM for $1.70.

Delphi notified the unions last weekend that its filing with the bankruptcy court today will call for a pay cut of $5 an hour, to $22 an hour, with a cut to $16 an hour in 2007. Each Delphi worker who stays for the last pay cut would get a $50,000 one-time payment. The union is trashing the offer as inadequate.

Delphi's final offer called for the layoff of all workers in the "Jobs Bank," a UAW program in which workers get full pay and benefits even if there isn't any work for them. Delphi also proposed freezing the employees' pension plan this October, eliminating retiree health-care benefits as of July 1, and then next year outsourcing all nonproduction work, such as janitorial, truck repair and building maintenance.

On Wednesday, Mr. Miller told his board he views the request to break labor contracts as an "insurance policy that we need to have but hope we won't have to use," say people familiar with the situation. If the union won't go far enough in wage-and-benefit concessions and GM won't make up the difference for Delphi, Mr. Miller wants the authority to take unilateral action.

In today's court documents, Delphi is expected to identify plants it will close. They're expected to include Milwaukee and Wichita Falls, Texas. But Lockport, N.Y., where workers snubbed Mr. Miller with the lawnmower T-shirts, is expected to survive. Delphi concluded that its thermal business has good global prospects in the future, said someone familiar with the matter.

The UAW this week told local union officials a decision on whether to hold votes on authorizing a strike won't come right away. That will give GM and Delphi some breathing room to negotiate. But even if all three sides agree in coming weeks, the union will have an uphill battle to get an accord ratified by its members, many of whom are already unhappy with health-care and other concessions made in the past year. "A strike may be the cathartic act the union needs" to get ratification, one official said.

UAW activists have been blasting union leadership for making concessions through the years and not taking a strike vote at Delphi. Mr. Gettelfinger, his lieutenants and many plant-level union presidents have been trying to assure members that negotiation was the best way to save jobs. His ability to keep a strike from happening and get the membership to agree to concessions has been a chief concern of GM and Delphi negotiators throughout the talks. Already, some plant workers are chatting among themselves about unauthorized strikes or work slowdowns.

GM shares fell about 4.9% yesterday to $21.06 as the Delphi move neared and investors awaited word from GM on the status of its plans to sell a stake in its GMAC lending arm. Delphi's stock finished down two cents at 55 cents a share.

Write to Monica Langley at monica.langley@wsj.com¹ and Jeffrey McCracken at jeff.mccracken@wsj.com²