Supplier Delphi, which has been in US Chapter 11 bankruptcy protection since October 2005, has asked the US Bankruptcy Court for permission to axe health care benefits and life insurance for salaried retirees.

Delphi made the request in a filing last Wednesday (4 February) and a hearing is scheduled for 24 February.

According to the Detroit Free Press, the move would affect health insurance benefits for about 15,000 salaried retirees. It would not affect current workers they - about 9,600 in the US - would no longer receive benefits after retirement.

Delphi has said its value has fallen harder than expected in recent months as the auto sector continues to slide into crisis.

In the court filing it warned that its business value "will be substantially below" the US$6.3bn it had estimated as a worst case scenario in October.

Delphi is arguing that it could save over $70m per year by cutting the salaried retiree health care programmes.