Delphi logo. Delphi Corp., the world's biggest auto parts maker, warned that it would consider bankruptcy if talks with labour unions and its main customer General Motors do not produce huge cost savings.
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Delphi Corp., the world's biggest auto parts maker, warned that it would consider bankruptcy if talks with labour unions and its main customer General Motors do not produce huge cost savings.
Delphi cannot keep up with the social costs of its workforce while General Motors, its former parent company, is cutting back production as part of efforts to confront its own financial crisis.
The bankruptcy threat came as Delphi announced that it made a net loss of 338 million dollars in the second quarter, against a profit of 143 million dollars in the same period of 2004.
Chief executive Robert Miller said that if the talks with unions and General Motors "do not lead to the implementation of a plan that addresses our existing legacy liabilities and the resulting high cost of US operations, we will consider other strategic alternatives, including chapter 11 reorganization for our US businesses, to preserve the value of the company and complete our transformation plan."
The company blames most of its financial woes on the health and welfare costs that came when it took over the General Motors social payments for workers.
Delphi said that General Motors still accounts for 49 percent of its business.
Delphi announced Friday that it was drawing on 1.5 billion dollars, nearly all of its 1.8-billion-dollar revolving credit facility, to stay afloat during the talks. |
