DETROIT -- Delphi Corp. CEO Steve Miller says he expects Delphi to emerge from Chapter 11 bankruptcy protection 20 percent smaller than it is today.
That means Delphi, of Troy, Mich., intends to shed plants and lines of business with revenue totaling about $5 billion before it leaves Chapter 11 protection sometime in 2007.
Delphi, which put its U.S. operations into bankruptcy protection on Oct. 8, posted global automotive sales estimated at $24.1 billion in 2004.
"Twenty percent is a good ballpark number," Miller said in an interview with Automotive News last week. He said the UAW and other unions can have a say in how much Delphi shrinks in the United States.
Depending on the wage and benefit cuts that the unions provide, Miller said, Delphi may be able to keep more factories open as it reorganizes its 45 U.S. plants and support centers under Chapter 11 protection to make them more cost competitive.
If the unions don't negotiate new agreements that allow Delphi to cut hourly wages of about $65 an hour, including benefits, the company said it will ask the bankruptcy court as early as December to terminate the pacts and impose lower wages.
U.S. Bankruptcy Court Judge Robert Drain gave Delphi until last Friday to present its labor demands to unions. The court has scheduled a hearing for Jan. 23 to address wages in Delphi's U.S. operations.
Just before Delphi entered Chapter 11 protection, it had asked the UAW for wage cuts from about $27 an hour to $10 an hour. Delphi also asked for cuts in pension and retirement benefits, an end to the jobs bank that pays laid-off workers nearly their entire salary, and other concessions.
Wages of $10 an hour are equal to $20,800 annually, or about $1,500 more than the national poverty threshold for a family of four.