A busy week for Delphi

From Automotive News

Here is a summary of news from the past week stemming from Delphi Corp.'s Chapter 11 bankruptcy filing on Oct. 8.

• Delphi listed assets of $17.1 billion and liabilities of $22.1 billion. The bankruptcy covers only Delphi and its 38 units in the United States. Non-U.S. subsidiaries were not included. It was the largest automotive Chapter 11 filing ever.
• Delphi cited high U.S. labor costs, contractual obligations to UAW workers and retirees and less business from GM as the primary reasons for the bankruptcy. Thousands of Delphi jobs and dozens of plants are at risk. Workers who keep their jobs could see significant cuts in pay and benefits.
• Delphi said the fate of its pension plans is unclear. That decision will depend on how strong Delphi is when it reorganizes.
• GM, Delphi's former parent, said its liability from the bankruptcy could be as high as $11 billion, but the figure would depend on factors such as pension and health care obligations for Delphi hourly employees who left GM when GM spun off Delphi in 1999. GM also said it could benefit from the restructuring because it pays an annual premium of about $2 billion for Delphi parts.
• Standard & Poor's cut its ratings on GM deeper into junk status and said it may cut the ratings again, citing the Delphi bankruptcy. S&P cut GM's long-term rating by one notch to BB-minus, from BB. GM and its financial unit had $284 billion of debt at the end of June.
• Delphi won preliminary approval for $950 million in financing to fund ongoing operations.
• During a press conference, CEO Steve Miller defended retention agreements for 21 top Delphi officers, which would allow them to collect 18 months of pay if they lose their jobs.
• Addressing speculation of possible UAW strikes at Delphi, Miller warned that such actions would only hasten and expand the number of U.S. plant closings.
• Delphi's white-collar workers won't be immune from layoffs. Delphi employs 2,500 salaried workers at its Troy, Mich., headquarters and 15,850 nationwide. Miller said last week he didn't know how many white-collar employees will be laid off because the company doesn't know which plants and business lines it will keep.
• Chatham, N.J., hedge fund manager David Tepper and his firm, Appaloosa Management LP, acquired 52 million shares, or about 9.3 percent, of Delphi common stock, according to a U.S. Securities and Exchange Commission filing.
• Delphi's stock was delisted from the New York Stock Exchange and now trades over the counter under symbol DPHIQ.

Compiled from Automotive News, Crain's Detroit Business and Reuters reports