Automotive supplier Delphi Corp. is pushing restructuring plans once again, cutting 8,500 jobs worldwide and preparing to close three North American plants.
The Oct. 16 announcement came as the Troy, Mich.-based firm reported a net loss of $353 million for the third quarter on sales of $6.6 billion. Delphi also has a new union contract that J.T. Battenberg, chief executive officer, chairman and president, said will allow Delphi to ``seize the opportunity'' to reform and consolidate.
``This new agreement provides a platform to take steps to improve our competitiveness,'' he said.
One of the three U.S. plants targeted - a battery manufacturing unit in Olathe, Kan. - includes injection molding for battery cases along with metal stamping and assembly that employs 250. Also to close is a Tuscaloosa, Ala., plant that makes condensers and a Flint, Mich., generator production plant.
Activities at the three plants will be consolidated into other existing Delphi sites.
Overall, the firm expects to cut 5,000 hourly jobs in the United States, 500 salaried jobs and another 3,000 elsewhere.
About 50 plants outside the United States also will see ``restructuring-type'' actions, said Alan Dawes, vice chairman and chief financial officer.
Delphi officials said the bulk of the cuts in the United States will come as United Auto Workers members take advantage of the retirement rules laid out in the firm's latest contract, approved in September. The contract also provides a final chance for Delphi workers who took their jobs prior to General Motors Corp.'s spinoff of Delphi to seek jobs within GM.
``Because negotiations have concluded, and in light of our employee demographics, we anticipate a high rate of normal retirements and significant opportunities for employees to return to GM,'' Battenberg said.
It is the second major employment cutback for the firm. In the spring of 2001, Delphi began slicing 11,500 jobs worldwide - 7,500 in the United States alone.
Since then, Delphi has extended its non-GM business. In the third quarter, ended Sept. 30, Delphi had more than 40 percent of its sales outside its former automaker parent. The firm aims to transition to less than 50 percent reliance on any one customer within two years, Battenberg said.
Total sales for the first three quarters of 2003 are $20.8 billion, up from $20.4 billion in 2002. Delphi reported a net loss of $138 million for the year so far, down from profit of $223 million a year ago.