Delphi

Last edited by apocalypticbeef on July 14, 2008 - 6:23pm

Company Snapshot:

Delphi primarily makes various automobile parts. The company's technology is also sold for computing, communications, consumer electronics, energy and medical applications. The company filed for Chapter 11 bankruptcy in 2005 and soon thereafter began operating as "debtors-in-possession" under court supervision, with the expectation of emerging from bankruptcy sometime in 2008. The company is a former division of General Motors (GM), separated in 1999.

Ownership status:

Publicly traded

Number of employees worldwide:

169,500

Chief executive officer:

Rodney O'Neal

2008 Global Fortune 500 rank:

305

Website:

http://delphi.com/

Corporate accountability

Accountability overview:

Delphi's then-CEO Robert S. Miller explained that the reason the company had to file for bankruptcy had to do with "one single, overarching issue" -- its workers are paid too much.

Miller insisted that Delphi's 34,000 workers in the United States accept pay cuts that would slice their wages to about $12.50/hr from $26-30/hour, or he would seek the bankruptcy court's approval for ripping up Delphi’s union contracts — and unilaterally imposing whatever wage rates the company deems appropriate.

At the same time, Delphi announced a series of executive pay hikes in a 35-page plan filed with the New York bankruptcy court -- totaling over $500 million, according to CEO pay analyst Sam Pizzigati.

While "turnaround artist" Miller loudly proclaimed he would pay himself just $1 for the year, the plan included a $3 million signing bonus Miller received when he took Delphi's reins just months before. Miller's top four executive colleagues would receive $3.1 million in annual salary under the plan, plus another $8.9 million if the company's assets get sold.

In 2008, the Detroit News reported that Delphi would pay its top two executives at least $24.6 million in cash and stock when the company emerges from bankruptcy. Delphi CEO Rodney O'Neal will receive a $5.3 million cash payment and an initial stock and option grant of $10 million, with half the amount in stock when the company exits bankruptcy, which is expected by the end of March; outgoing executive chairman Miller would receive an $8.3 million cash payment upon the company's emergence from bankruptcy.

Tax issues:

In January 2008, Automotive News reported that The State of Michigan is conducting two new tax audits at Delphi Corp. as it presses a bankruptcy court to force the supplier to pay $10.5 million in unpaid business taxes.

Labor:

In 2005, as Delphi entered into bankruptcy, it sought to cut two-thirds of its 34,000 hourly workers in the United States, and cut wages for the rest by as much as two-thirds (reduced from $30 to $10).

Delphi also sought major cuts in the health care and pension benefits of retirees, though under the terms of the spinoff of Delphi, G.M. would have to assume much of those costs. In November 2005, U.A.W. members agreed to allow the company to shave $15 billion, or nearly 20 percent, from its retiree health care liability.

As part of the 2005 bankruptcy plan, the company announced plans to close dozens of U.S./Canadian plants.

Environment and product safety:

The Political Economy Research Institute ranked Delphi as 21st among the top 100 polluters in the U.S. in 2002. The Delphi plants with the most pollution include Syracuse (NY), and Saginaw (MI).

The contraction of credit markets may make it more difficult to pull the company out of bankruptcy. Faced with the prospect that its bankruptcy-reorganization plan could unravel because of its inability to obtain $ 6.1 billion in loans, the company petitioned the court for more time. Meanwhile, Delphi accused investors of illegal insider trading -- including Harbinger Capital Partners, Pardus Capital Management LP, Merrill Lynch, UBS and Goldman Sachs. According to the Wall Street Journal (3/13/2008), at least one of 17 investor groups shorted the company's bonds in late January and early February after obtaining confidential information from private meetings with the company.

Financial information

Stock ticker symbol:

DPHIQ.PK

Total revenue:

$ 22.3 billion

Fiscal year:

2007

Net Income:

-3.065 billion

Fiscal year:

2007

Major lines of business/segments:

Electronics and Safety (audio, entertainment, safety systems, displays, etc.); Powertrain Systems (fuel injection, combustion, exhaust handling, etc.); Electrical/Electronic Architecture; HVAC;

Link to annual report:

Investor Information

Additional descriptive data

Geographic breakdown of revenues (sales and profits), assets, employees:

Delphi employs nearly 70,000 workers in Mexico, where it is one of the largest private employers.