DETROIT -- Delphi Corp. posted a net loss of $1.86 billion in June as it took a $1.56 billion charge for the cost of pension and postemployment benefits related to buyouts of unionized U.S. workers.
Excluding the charges, the supplier's operating loss was about $290 million, slightly higher than the $277 million operating loss in May.
The mounting U.S. operating losses reinforce Delphi's case for lower wage and benefit rates to bring the company's costs closer to those of the competition, Delphi spokeswoman Claudia Piccinin said.
The company continues to seek a consensual agreement with the UAW and five other unions representing 33,000 U.S. hourly employees to reduce labor costs, Piccinin said.
Delphi has a hearing scheduled Aug. 11 in U.S. Bankruptcy Court in New York on its petition to terminate its labor agreements. Delphi's two largest unions, the UAW and IUE-CWA, have threatened to strike if the court approves the plan.
Piccinin declined comment when asked whether Delphi intended to make another wage and benefit offer to the unions before the hearing.
UAW President Ron Gettelfinger has criticized Delphi for the pace of talks. The most recent offer to the UAW, which Delphi later pulled, would have cut wages from the current average of $28 an hour to about $12.50. Gettelfinger said UAW workers already have made huge sacrifices. A General Motors-financed retirement and early-retirement program will retire at least 12,600 UAW workers before year end.
Delphi's overseas operations continued to be a bright spot in June. The operations posted income net of tax of $20 million in June and $214 million in the first half of 2006. By contrast, Delphi's U.S. operations have posted net losses of $2.64 billion in the first half. Delphi put its U.S. operations in Chapter 11 bankruptcy protection Oct. 8.
Delphi, of Troy, Mich., ranks No. 4 on the Automotive News list of the top 100 global suppliers with estimated worldwide original-equipment automotive parts sales of $22.59 billion in 2005.
You may e-mail David Barkholz at [email protected]