TROY, Mich. -- Delphi Corp. and its former parent General Motors will be negotiating massive financial issues as the nation's largest auto parts maker works its way through Chapter 11 bankruptcy proceedings. But Delphi Chairman and CEO Steve Miller really wants one thing from GM.
Future business -- and lots of it.
The amount of future GM business could influence Delphi's reorganization and future pension obligations, Miller suggested during remarks at a press conference at Delphi headquarters Wednesday afternoon.
"We are asking GM for one thing," Miller told reporters. "Give us a full fair shot at your future business. It needs to be robust enough to replenish pensions. Keep me in the mix when awarding new business. I just want a fair shot."
Delphi filed for protection in U.S. Bankruptcy Court in New York on Saturday, citing uncompetitive wage rates, high fixed business costs and a loss of business in North America. The fate of Delphi's underfunded pension plans are subject to bankruptcy negotiations.
It will take several months of litigation to restructure Delphi's business. The Chapter 11 action does not affect Delphi's overseas interests, which continue to grow.
Miller is making the pitch for future GM business even as Delphi suffers from its already high percentage of GM sales.
Delphi has considerable dependence on GM in North America, where the automaker supplied $13.7 billion, or 70 percent of its $19.6 billion in sales last year.
GM's loss of market share and production cuts contributed to Delphi's failure, Miller said.
"The sharp decline in GM market share has reduced GM North American production volumes by a million units per year, from 5.5 million to 4.5 million units, in the last three years," Miller said. "The impact on Delphi has been to reduce revenues by several billion dollars a year worth of parts. Given our high fixed costs and inflexible labor costs, the result has been devastating."
Delphi's bankruptcy continues to resonate in communities around the country dependent on the company's plants. Several Delphi plants in New York, Ohio, Indiana and Michigan are all at risk as the company reorganizes.
Miller said he has been fielding calls from political leaders in the affected areas, including U.S. Sen. Hillary Rodham Clinton, D-N.Y., and Michigan Gov. Jennifer Granholm.
"Globalization is sweeping over the country and people are angry," he said. "I understand that."
Miller also defended the company's retention agreements for 21 top officers, which would allow them to collect 18 months of pay if they lose their jobs without cause or leave "for good reason." Delphi has been criticized by the UAW, political leaders and various media outlets for giving out those deals while asking rank-and-file employees for wage cuts as high as 60 percent.
Retention arrangements, while controversial, are common for large corporate bankruptcies.
"For starters, nobody got enriched by this," Miller said. "You have to get fired to qualify for 18 months severance, which is still below the 24 months industry average.
"The program costs exactly zero unless I fire someone. And since we're in a terrible bankruptcy wherein we will be shrinking our business, some of these managers will be asked to work themselves out a job. I need them to stay on to finish. And I need them to worry less that some corporate raider takes over and dumps them."
Miller reiterated previous statements that he would be willing to take a cut in his $1.5 million annual salary "if that is what it takes to get the necessary restructuring agreements."
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