DETROIT -- Delphi Corp.'s board of directors on Wednesday slashed the auto supplier's quarterly dividend by more than half to 3 cents per share.
Delphi paid a dividend of 7 cents per share for the quarter that ended on Dec. 31, 2004.
The Troy, Mich., supplier cited the "uncertain near-term industry outlook" as the reason for the cut.
General Motors and Ford Motor Co. have cut back on planned production for the first and second quarters of this year. Those cutbacks are rippling through the supplier industry, along with higher costs for raw materials.
GM, Delphi's former parent, accounted for 54 percent of the supplier's total sales at the end of 2004, a Delphi spokeswoman said.
The dividend cut is another blow in what has been a turbulent month for Delphi. On March 4 the supplier announced the forced resignation of CFO Alan Dawes. It also disclosed that cash flow from operations was improperly inflated by $200 million in 2000 by off-balance-sheet transactions and that pre-tax income was inflated by $61 million in 2001 by improper accounting for rebates from information technology suppliers.
On Tuesday, Delphi said that it had wrongly accounted for $237 million it paid in 2000 to GM and that it was reviewing the accounting treatment of another $93 million,
Delphi ranked No. 1 on the Automotive News list of the top 100 global suppliers with 2003 worldwide original-equipment automotive parts sales of $26.20 billion. For 2004, German rival Robert Bosch GmbH claims it passed Delphi to be the No. 1 auto supplier.
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