CHICAGO -- Struggling parts maker Delphi Corp. on Tuesday told the United Auto Workers it, and the domestic U.S. auto industry, faced intense challenges, but released no details about what it told union leaders in an annual business update.
Delphi cited a reduced risk of bankruptcy for the parts supplier, though adding it is "by no means out of the woods."
Delphi has struggled under high wage and benefit costs since its spinoff from General Motors in 1999 and from GM light-vehicle production cuts in recent quarters. It expects later in June to restate results in connection with accounting improprieties that forced out four top executives.
President Rodney O'Neal and Kevin Butler, vice president of human resources management, briefed UAW international and local leaders in Detroit, the company said in a statement.
"It was really a fairly clear and accurate candid discussion of the current state of the industry and the state of where we are as a company, and it has to go from there," Ronald Pirtle, president of Delphi's thermal and interior division, told reporters after the meeting.
Pirtle declined to comment on whether executives talked about possible job cuts or relief from high health care costs, though a union official who declined to identify himself said job cuts were not discussed at the meeting.
Chairman and CEO J.T. Battenberg, who announced earlier in 2005 he plans to retire by the end of the year, did not stop to talk with reporters after the meeting.
In raising its rating, Merrill Lynch said it appears GM may have some liability for Delphi's inherited costs should the supplier file for bankruptcy, giving GM motivation to help Delphi avoid Chapter 11, analysts John Casesa wrote.
Delphi is also apparently close to naming Battenberg's successor and likely will reduce or eliminate its dividend at a regularly scheduled board meeting on Wednesday, Casesa said.
"While these developments are on balance positive, the company is by no means out of the woods ...," Casesa said.
Delphi still relies on GM for about half its revenue and the U.S. Securities and Exchange Commission also has a probe into its accounting, he said.
Delphi has been restructuring since its spinoff and 2005 plans include cutting 8,500 jobs, trimming some noncore business and consolidating or closing unprofitable plants.
The parts supplier designates unprofitable plants to an Automotive Holdings Group, which currently includes 11 plants with 11,000-plus workers, about 8,000 represented by the UAW. Delphi has about 184,500 workers worldwide.