Latest plan could mean more cuts at Delphi
Business First of Buffalo - by Tom Hartley Business First
The parent of Delphi Harrison Thermal Systems in Lockport is considering further job cuts in the face of a projected slowdown in auto sales next year.
Details on how Delphi Automotive Systems Corp. plans to respond to the forecast and what effect the restructuring could have on the troubled Lockport operation will be disclosed Monday when corporate executives participate in a 10 a.m. conference call.
Spokesman Steve Gaut at Delphi headquarters in Troy, Mich., declined to give specifics of what will be announced, but confirmed that the corporation is "looking at rationalizing and making as efficient as possible all our sites around the world."
The presentation by President and CEO J.T. Battenberg III and Chief Financial Officer Alan Dawes is Delphi's traditional end-of-year conference with securities analysts and investor representatives.
"We're intending as we have in past years to provide our outlook for the coming year and discuss any actions that are under consideration to respond to our outlook," Gaut said.
General Motors Corp., the nation's largest automaker, expects auto sales next year to fall 10 percent to 12 percent. GM accounts for 68 percent of Delphi Automotive's business and more than 90 percent at Delphi Harrison at Lockport.
Automotive News, an industry magazine, said facility consolidations are possible and that any job cuts would be on top of the 11,500 that Delphi Automotive announced last March. So far, 8,500 job cuts and seven of nine planned facility closings are complete.
The Lockport site, which makes radiators and air-conditioning components, has struggled to meet the parent company's profitability targets and was labeled a "troubled" operation last summer.
Union workers last October approved a turnaround plan aimed at moving the site in the direction of the targeted goals.
Meanwhile, the manufacturing complex continues to shrink its work force through a combination of retirements and retirement incentives that are elements of the plan.
In November, 100 hourly workers accepted retirement packages. Coupled with the 205 who retired in October, the retirements have lowered total employment at Western New York's largest manufacturer to 4,900.
One year ago, 5,700 people worked at the Lockport site.
Meanwhile, two Delphi Harrison Thermal Systems plants in Ohio have been told to improve their productivity and profitability. The warning is similar to what corporate executives gave the Lockport plant.
The two plants in suburban Moraine employ about 2,000 workers and make compressors for heating and air-conditioning systems sold to General Motors.
Delphi Automotive, which was a part of General Motors until 1999 when it became a separate independent company, loses the right of last refusal from GM on Jan. 1, 2002.
The change of relationship comes as no surprise. It was negotiated upon Delphi's separation from General Motors. The provision had given Delphi the right to retain existing business by matching competitors on price and other criteria.
Delphi still counts on GM for a majority of business, which this year is an estimated $26 billion in global revenues.
Other suppliers say they see the new relationship as an opportunity to increase business with GM at Delphi's expense.
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