To make Delphi Corp. more competitive, its CEO is focusing on what he calls the five Ps.
J.T. Battenberg III said yesterday at the Management Briefing Seminars that he is concentrating on product, process, people, place and public policy.
In a separate interview, Battenberg pointed to another way to make Delphi more competitive. He said the company is considering dropping into a Tier 2 roll for some of its commodity products to cut r&d costs.
The strategy is an additional option to save some of the business in Delphi's unit of money-losing factories, called the Automotive Holdings Group.
"On one car line, we provide a brake booster to Bosch, for example, who might have Tier 1 responsibility," Battenberg said. "So you could put a scenario together where you might reduce your Tier 1 costs."
Another global supplier, Visteon Corp., is working on a similar strategy.
Delphi has pledged to fix, close or sell the 16 U.S. plants in the Automotive Holdings Group. The company will close one of those plants, Flint West in Michigan, as early as this month. The plant mostly made generators.
"Our first priority is to get the quality right," Battenberg said of the group. "Next, is getting the lean manufacturing criteria in place so we can get the waste out."
The Automotive Holdings Group's quality is now competitive with the rest of Delphi, he said, which is running at single-digit problems per million parts.
Another option to fix the group is to consolidate businesses, Battenberg said.
"There are some that you can consolidate and make stronger, where you may have too much capacity online, too many plants," he said.
Delphi's new two-tier wage structure for UAW workers also will help. The company already has hired 150 workers at the lower wage - about $23 and hour including benefits, compared with $70 for longtime workers. Battenberg said Delphi will see a big improvement in its competitiveness within two or three years.