Delphi Corp. said Tuesday that its third-quarter net
loss narrowed due to smaller expenses related to its reorganization
under bankruptcy protection, but it continued to struggle against
the effect of auto industry production slackness in North America.
Troy-based Delphi, the former parts-making operation of General
Motors Corp., lost $1.2 billion or $2.08 per share, compared with a
loss of $2 billion or $3.51 per share in the third quarter of 2006.
The latest loss included an accrual of $369 million for interest
expenses related to its bankruptcy reorganization plan, $124 million
in charges for warranty matters and $112 million in costs including
benefits for employees who have been let go.
It also included charges of $244 million for programs to train
U.S. employees for new careers, down from $1 billion a year earlier.
In a filing with the Securities and Exchange Commission, Delphi
said production cuts at GM, Ford and Chrysler, rising commodity
prices and high labour costs were to blame for its ``poor financial
But Delphi said union concessions approved this year will improve
``We are beginning to see the benefits of decreased labour costs,
primarily through lower costs of sales and the resultant improvement
in gross margin,'' Delphi said.
``However, we still have future costs to incur to complete our
transformation plan, divest of non-core operations and realign our
Delphi reported revenue of $6.2 billion in the third quarter of
2007, up about three per cent from $6 billion in the same three
months in 2006.
GM remains Delphi's biggest customer, and the supplier said its
future remains tied to GM. Non-GM revenue was $3.6 billion, 58 per
cent of the total, up from $3.4 billion in the third quarter of
``Delphi is facing considerable challenges due to revenue
decreases and related pricing pressures stemming from a substantial
reduction in GM's North American vehicle production in recent
years,'' Delphi said in the filing.
Delphi, spun off by GM in 1999, filed for bankruptcy in 2005. It
plans to emerge from bankruptcy early next year.
Its reorganization program includes closing or selling 21 of its
29 U.S. plants as it shrinks to eight factories making electronics,
safety systems, heating and air conditioning systems and some