Disappearing Delphi

Delphi Corp., the major supplier of auto parts in the US market, plans to close or sell more than two thirds of its 29 US plants. If the plan is approved by bankruptcy court, the company would focus on high-end electronic technology – with the eight remaining US plants making products that require immediate installation. The sell-off could allow the company to end its union contracts with 17,000 US workers, more than 9 percent of its total global workforce. Analysts expect firms from India and China to purchase the closed plants and equipment at distress-sale prices, giving them a foothold in the US market. The company has 120 plants throughout the world. In the past, Delphi’s CEO has complained that US wages simply cannot compete with global competition, with workers at Mexican Delphi plants earning about $7000 per year. Executives won’t be immune from the sell-off either, with the plan expected to reduce their ranks by almost half. – YaleGlobal