DETROIT -- Delphi Holding CEO Rodney O’Neal said today that he’s making a business case with the automakers -- including General Motors Co. -- to buy electronic parts from suppliers for their electric vehicles.
His sales pitch comes amid signs that the automakers are pulling those parts in-house as part of their electrification efforts.
GM has designated electric-car motors and other electronics parts as core technologies and is investing in factories to build many of the parts itself instead of outsourcing them to suppliers such as Delphi.
O’Neal said on the sidelines of the 2011 Automotive News World Congress that customers have every right to build whatever parts they want. But he would like a chance to make a case that Delphi can bring world-class technology and cost savings to the electric-car development effort. O’Neal participated on a supplier and purchasing panel at the World Congress.
“We can make a compelling case,” O’Neal said.
Still a key player
Despite a four-year bankruptcy that slashed Delphi’s revenue by more than half, the company remains one of the world’s largest suppliers of electronics, safety systems and telematics.
O’Neal said the automakers have traditionally viewed powertrains as core systems that needed to be developed and built in-house. But electric motors that now are key to the powertrains of electric vehicles have traditionally been sourced to suppliers because they could produce them at lower cost and draw on technologies from all over the world.
He said he is having “dialog” with customers to determine where it would make economic sense to keep the business with suppliers such as Delphi.
Not worrying about IPO
O’Neal said he’s concentrating on those types of concerns and growing Delphi’s business rather than wondering whether the equity markets and Delphi are ready for the company to plan an initial public offering. Rumors of an IPO have circulated recently.
Delphi shareholders were wiped out by the company’s bankruptcy when it emerged from Chapter 11 in 2009. Today, it is owned by lenders who took control of the company rather than selling it to outside investors.
O’Neal said if he takes care of internal operations, the equity structure of Delphi will take care of itself.
Delphi posted global revenues of $11.76 billion in 2009, the last year it was publicly traded.