South American automobile manufacturers seeking world-class technology and solutions for their air conditioning requirements can look no further than Jaguariuna, Brazil, where Delphi Automotive Systems (NYSE: DPH - news) today officially inaugurated its newest Compact Variable Compressor (CVC compressor) manufacturing facility.

Delphi Chairman, CEO and President J.T. Battenberg III joined several company officials, a number of special guests and employees of the new plant at inauguration ceremonies today in Jaguariuna, some 100 km north of Sao Paulo.

The 10,000-square-meter plant, Delphi's first compressor facility in South America, further expands the company's CVC compressor manufacturing footprint. It also illustrates Delphi's commitment to partnering with South American customers, Battenberg said, and bringing the very best in innovation to a region that holds great potential within automotive air conditioning.

"We are very confident that we will compete strongly in this promising and developing market, and we will do so with industry-leading technology like the CVC compressor," Battenberg said. "The South American market will have our most evolutionary compressor design, one that's quieter, more fuel efficient, and delivers best-in-class performance in a small package.

"That's a combination we feel will lead to great opportunities -- for us and our customers."

Those opportunities will come in a market that shows a significant increase in automotive air conditioning penetration. Company forecasts have South American A/C penetration reaching 40 percent by 2003.

That, coupled with an anticipated resurgence in OEM production in Brazil and other countries, creates an ideal environment for Delphi to continue its global momentum for its cutting-edge CVC compressor. Featuring best-in-class performance ratings in relation to mass and volume, the CVC compressor brings the company's most innovative compressor technology to South America.

"This compressor design represents Delphi's advanced thermal management technology at its finest, and we look forward to delivering that high level of excellence to our customers," said Ronald M. Pirtle, president, Delphi Harrison Thermal Systems. "Its design flexibility and vast lineup of configurations make it a perfect fit across the entire spectrum of automotive applications."

Delphi has made an initial investment commitment of USD $45 million in the operation, which earlier this month officially began production to support customers. The plant will employ approximately 150 people when full production is reached. Its capacity is 500,000 units annually.

To date, current and future business booked at the facility includes support of Volkswagen do Brasil and GM do Brasil, and Delphi expects to continue expanding the plant's customer base. In addition to OEM production, Volker Barth, president of Delphi South America, said the plant also seeks to support its South American customers' export programs, and will serve the automotive aftermarket as well.

Sandra Y. McCulloch, Delphi Harrison Thermal Systems director of South American operations, said that the plant's localized supply content initially will be approximately 50 percent the first year, and the company anticipates that number to grow steadily over the next few years. Delphi is encouraging suppliers with whom it has experience in other markets to locate in Brazil, and continues its efforts to develop suppliers already based in Brazil.

"The success of the Jaguariuna plant is very dependent on having highly capable and committed suppliers located as close to the plant as possible. We will look for, and encourage, that kind of local presence with our new CVC compressor plant," McCulloch said. "Local relationships with our suppliers will allow us to remain lean and efficient, and contribute to the overall competitiveness of the operation."

Another key component in strengthening the operation's competitiveness is its manufacturing processes, which like the compressor itself represent entirely new compressor technology.

Similar to CVC compressor facilities in other markets, the Jaguariuna site is transitioning to cell manufacturing, a simplified, flexible operation that falls in line with the company's drive to become leaner and more customer focused. The cell approach is designed to keep the manufacturing processes as flexible as possible, enabling changes in customer requirements to be adopted quickly.

Featuring a "swash" plate configuration, the Compact Variable Compressor produces less noise and vibration than contemporary designs, and features best-in-class output performance. With its wide range of displacement offerings and a high degree of design flexibility, the CVC compressor is adaptable to small, mid-sized and large vehicles. Its highly efficient mode of operation allows automakers to realize savings in energy consumption, and is a key part of Delphi's initiatives targeting energy efficiency and environmental stewardship.

Delphi's CVC compressors are already manufactured in France, USA and Japan, and the company's joint venture in Hungary is scheduled to begin production in 2001.

Multi-national Delphi Automotive Systems, with headquarters in Troy, Mich., USA, Paris, Tokyo and Sao Paulo, Brazil, is a world leader in transportation and mobile electronics components and systems technology. Delphi's three business sectors -- Dynamics & Propulsion; Safety, Thermal & Electrical Architecture; and Electronics & Mobile Communication -- provide comprehensive product solutions to complex customer needs. Delphi has approximately 213,000 employees and operates 176 wholly owned manufacturing sites, 41 joint ventures, 53 customer centers and sales offices and 30 technical centers in 38 countries.