Delphi Acknowledges Chapter 11 ‘A Possibility’
Delphi CEO Steve Miller has predicted Delphi, the world’s largest car parts manufacturer, could enter bankruptcy by 17 October unless the United Auto Workers union and GM agree on a relief plan. Robert “Steve” Miller Jr came out of retirement in Oregon to lead Michigan-based Delphi.
However, Aftermarket News points out that Delphi Europe has operating margins that are “consistent or better” than its European competitors, that it its cash flow is positive and that it is self-financed. As the European company does not rely financially on its North American parent and as its operations are different legal entities than those based in the USA, it believes that whatever happens there will not immediately effect it.
Chapter 11 is a legal mechanism in the USA for the reorganisation of a company and its capital structure while it continues its day-to-day operations. The current signs are that Delphi may yet not have to take this course of action and will reach agreement with the vehicle manufacturer and the trade unions. However, if it does, it does not plan any reorganisation outside of North America.