Steve Miller: Delphi has "plenty of cash" to get through the next several months.
But Miller does want some indication from GM and the UAW of whether they are willing to make concessions to ease Delphi's crushing labor costs. At the moment, Delphi's cash flow is neutral, so the company isn't about to run out of money.
But Delphi's customers and vendors need reassurance that the company can negotiate a bailout and restructure itself, he says. "In our effort to (fix) our high labor costs, we'll hopefully get done with our negotiations over the next couple of months," Miller said last week at the Frankfurt auto show. "One way or the other, we will fix our problems of high labor costs, but without labor disruptions."
Outline of a deal
This summer, Delphi, of Troy, Mich., has been holding separate negotiations with GM and the UAW. While negotiators have declined to discuss specifics, a deal most likely would involve the return of Delphi workers to GM.
In theory, the automaker, which spun off Delphi in 1999, could offer buyouts to induce hourly GM employees to retire early. Then GM could replace some of those retirees with Delphi workers.
Delphi employs about 24,000 UAW members. Wages and benefits average $60 an hour. Delphi's competitors pay workers about half as much.
If GM takes back Delphi workers, in turn it could demand health care concessions from the union.
The UAW has indicated it is willing to make those concessions as long as it does not have to reopen the contract.
But such a deal will be difficult for GM and the UAW to swallow. Miller kept the pressure on last week by noting that Delphi could declare bankruptcy anytime before Oct. 17.
"We have done all the necessary contingency planning," he said. "If we need to use Chapter 11, we will be adequately financed."
At the same time, Miller must reassure customers that a Delphi in bankruptcy protection could continue to deliver parts without disruptions. That message had an added urgency in light of the financial crisis at Collins & Aikman Corp., the Troy, Mich., interior parts supplier that entered Chapter 11 in May.
After Collins & Aikman ran out of money in bankruptcy, customers were forced to loan it $82.5 million, and GM has asked for court permission to seize its tooling if the supplier cannot find new financing.
Miller says Delphi has "plenty of cash" to get through the next several months, with or without Chapter 11.
Delphi ranks No. 2 on the Automotive News list of the top 100 global suppliers with estimated worldwide original-equipment automotive parts sales of $24.10 billion in 2004.