With less business coming in and a growing number of plants for sale, North American auto suppliers are writing down the value of their assets - and the numbers are big.
Delphi Corp., which is in Chapter 11 reorganization, last week tidied up its balance sheet by nearly $1 billion. Delphi said it would take noncash asset and goodwill impairments totaling about $952 million for the last three months of 2005. Of the total, about $377 million is an asset impairment covering 21 plants and sites in North America and western Europe.
The goodwill write-down was $575 million. That was split between $252 million for Delphi units currently in Chapter 11 bankruptcy reorganization and $323 million for units not in Chapter 11. Goodwill is basically the difference between what is paid for an asset and its actual book value.
Delphi, of Troy, Mich., put its U.S. operations in Chapter 11 on Oct. 8.