Delphi Corporation, struggling to stay out of bankruptcy, has acknowledged that it is continuing discussions with its major unions and General Motors over a “comprehensive restructuring designed to address Delphi’s existing US legacy liabilities and the resulting high-cost structure of its US operations going forward”.
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Chairman and CEO Steve Miller said in a statement: “While I’m pleased that we continue to be in discussions on a consensual restructuring, as everyone is aware we have been working on this for quite some time and our board is committed to achieving a successful restructuring of Delphi, one way or another.”
Delphi also said it planned no comment until it was ready to announce a restructuring plan.
A recent Automotive News report noted that Europe is profitable for Delphi, and North America is not. Miller has previously said Delphi would not wait until it runs out of cash before deciding to file for Chapter 11 bankruptcy protection under US law.
The parts maker 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.
Miller has said 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,” Miller has said recently.
On a recent trip to Germany, Miller met with most of Delphi’s non-GM customers – DaimlerChrysler, Volkswagen, BMW, Renault, PSA/Peugeot-Citroen and Fiat Auto.
