According to Automotive News Europe, Delphi CEO Robert “Steve” Miller is reassuring European carmaker customers that the supplier is handling its US financial problems and wants to keep their business.

Europe is at the centre of the US supplier’s plans to diversify globally. Only 18% of Delphi’s European revenues come from its former parent General Motors. GM provides more than half of Delphi’s North American revenues.

Europe is profitable for Delphi, and North America is not. Miller said Delphi would not wait until it runs out of cash before deciding to file for Chapter 11 bankruptcy protection under US law.

Delphi is trying to avert bankruptcy by getting concessions from General Motors and the United Auto Workers union. When GM spun off Delphi as an independent company in 1999, the parts maker inherited many employees paid at GM’s high wage rate – more than $US60 an hour.

The high labour and health care costs made Delphi less competitive and jeopardised its financial health. In the US, corporations must bear employee health care costs because there is no public health care system.

Miller says he does not need to complete bailout negotiations with GM and the UAW before October 17, when US bankruptcy laws will change. If GM and the UAW assure him that they are willing to negotiate a bailout, Miller will allow the October 17 deadline to pass.

“I’ve got plenty of cash to get through the next several months, if that’s what it takes,” said Miller, who took over as Delphi CEO on July 1.

While in Germany last week, Miller met with most of Delphi’s non-GM customers – DaimlerChrysler, Volkswagen, BMW, Renault, PSA/Peugeot-Citroen and Fiat Auto.

Lars Holmqvist, executive director of European supplier organization CLEPA, said: “Everybody knows [Delphi] has to do something drastic. Otherwise, nobody will believe in their future.”

Miller sought to reassure them by saying the US Chapter 11 bankruptcy process is less harsh than most European countries. US laws protect a company from its creditors but leave existing management in place. Under European law, a court administrator runs the business.

“We’re trying to be sure our customers understand the difference between our situation and the disastrous situation of a company called Collins & Aikman,” said Miller. “Collins & Aikman is being restructured on the backs of customers. We will successfully restructure, whether in or out of court, and we will continue to keep their business.”

Collins & Aikman, a US-based interior parts supplier, filed for Chapter 11 last spring. Its reorganisation has been chaotic. After it ran out of money, customers were forced to loan it tens of millions of dollars, and General Motors tried to remove its tooling from one Collins & Aikman plant.

Miller said a Delphi Chapter 11 bankruptcy filing would avoid such chaos. Miller cited his own experience at a company that he helped guide through Chapter 11.

“We have done all the necessary contingency planning,” he said. “If we need to use Chapter 11, we will be adequately financed.”