Delphi rebirth began with slash-and-burn bankruptcy
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Delphi's painful slog through Bankruptcy Court took four years -- but that's where its turnaround began.
After J.T. Battenberg III retired in 2005, new CEO Steve Miller, who had been brought in to oversee Delphi's turnaround, took Delphi into Chapter 11 reorganization in October 2005.
Few things went right in the beginning. Battenberg was under federal investigation for allegedly defrauding investors by misstating Delphi's financial transactions.
A federal court jury in Detroit subsequently found Battenberg not guilty of fraud, although he paid a $215,000 fine for the financial misstatements that artificially boosted earnings.
Meanwhile, Miller quickly earned the UAW's enmity when he demanded deep wage cuts for workers, then asked the Bankruptcy Court to approve generous bonuses for Delphi executives.
The union eventually agreed to cut wages from $27 an hour to a range of $14.50 to $18, but it didn't save many jobs.
Delphi eventually unloaded its chassis, bearings, catalysts, batteries, latches, cockpits, chassis electronics and low-content instrument clusters operations.
The company also returned its brakes and steering units to GM, which subsequently sold them.
Delphi kept five plants and four technical centers in the United States that employ 1,000 hourly workers -- none of them UAW members.
Despite the controversy, Delphi emerged from its hellish reorganization in 2009 in fighting trim.
Rodney O'Neal, who had been named COO in 2005, replaced Miller as CEO in 2007. O'Neal, 58, is a GM lifer who began his career in 1971 as a student at General Motors Institute.
After a number of manufacturing and engineering jobs, he was named general manager of Delphi Interior Systems in 1997.
During the bankruptcy, O'Neal whittled down Delphi's portfolio from 119 product lines to 33. He also identified three main growth areas for Delphi that could be clearly communicated within the company and to customers and shareholders: "safe, green and connected."
In the realm of safety, for example, Delphi markets airbag electronics and collision-avoidance radar. In the "green" segment, Delphi sells diesel injectors and direct-gasoline injection systems. And in the "connected" sector, the company produces infotainment systems and reconfigurable displays.
Delphi emerged from bankruptcy as a smaller company. Last year it generated net sales of $16 billion, down from $22.6 billion in 2005, the year it went bankrupt.
The company now ranks 10th on Automotive News' list of the top 100 global suppliers, down from fourth in 2005. But Delphi is profitable. Last year, net income totaled $1.2 billion, compared with a $2.4 billion loss in 2005.
You can reach David Sedgwick at dsedgwick@crain.com.
