BEIJING -- Delphi Corp.'s Chapter 11 filing should mean more business for Delphi in China, say Delphi executives here.
Delphi has 11 manufacturing sites in China making a variety of parts. Delphi's international companies, including major operations in China and Mexico, were not included in the Chapter 11 filing.
In the past, Delphi China has steered some business it could have handled to its North American operations to avoid political fallout, says a Delphi executive in China who asked not to be named.
Now moving manufacturing to low-cost countries has become conventional wisdom.
"We must realign our product portfolio and manufacturing footprint to preserve our core businesses," said Steve Miller, CEO of Delphi in the United States in a bankruptcy court filing. "This will require a substantial segment of our U.S. manufacturing operations to be divested, consolidated or wound down."
Meanwhile, Delphi's sprawling operations in Mexico also could pick up business from the United States. Delphi has 52 plants in Mexico.
"It's way too early to determine the impact in any specific area," Delphi spokesman Michael Hissam told Automotive News. "In Mexico our business continues as before."
Among the components likely to be sourced from China are heating and cooling system components, electronic control modules, cockpit components and chassis and steering system components.
"Not every product is suitable to be produced overseas," says Jay Jiang, deputy general manager of Delphi China. "Some are heavy and not good for shipping, like cockpit modules. Other products involve frequent engineering changes. They might not be suitable to make overseas because of the 20 days shipping required."
But high-value small electronics parts like those produced at Delphi's plant in Suzhou near Shanghai would be a good candidate for export, says Jiang. "They are small and light and could even be transported by air."
Delphi China makes many components that go into cockpit modules, including air conditioning controls. They could be shipped back to the United States, he says.
Even systems that require frequent engineering changes still could source some parts in China for final assembly in the United States, says the Delphi executive who asked not to be named.
He added: "Some steering equipment and chassis parts don't change much."
Special correspondent Theresa Braine contributed to this report
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