NEW YORK (AP) - Auto parts maker Delphi Corp. reported Friday that it lost
more money in the first quarter than it did a year ago, but that an expanded
credit line will still allow it to emerge intact from bankruptcy protection.
Delphi lost $589 million in the first three months of this year, on revenue
of $5.3 billion, compared to a loss of $533 million on revenue of $5.7 billion
in the same period in 2007.
The company, based in Troy, Mich., also said it had increased its available
credit to $4.35 billion from $4.1 billion. Delphi said that would give it enough
money to support its plan to get out of bankruptcy, which has been delayed
repeatedly because of a crisis in the availability of credit and the withdrawal
of a key investor.
Early last month, Appaloosa Management LP pulled out of a plan to invest as
much as $2.55 billion in return for equity in a reorganized Delphi. At the time,
Appaloosa and five other investors said they still hoped to participate in the
reorganization, just not under the deal that had been agreed upon earlier.
Delphi recorded a $79 million loss in the quarter for fees it had paid when it
first entered the agreement.
It also reported $42 million in costs related to buyout and early retirement
offers to union workers. Delphi has been slashing its unionized work force in
the U.S. while expanding its overseas presence.
Delphi also said Friday that General Motors Corp. has agreed to speed up
payments it would have made to Delphi once it emerges from Chapter 11 bankruptcy
protection. GM, which is Delphi's former parent, accounted for 31 percent of
Delphi's revenue in North America in the first quarter, compared to 62 percent a
year ago. The two companies are intertwined through a number of legacy
obligations including pension plans and labor contracts.
The company also said it would not seek to extend waivers for funding its
pension plans from the IRS and Pension Benefit Guaranty Corp. Delphi said the
waivers, which are needed when a company can't make the required contributions
to its plans, were no longer needed according to a valuation of the plan as of
Oct. 1, 2007.
The PBGC, the government agency that backs up pension plans, warned Delphi
Friday that without the waivers, the company should complete the planned
transfer of pension obligations to GM by Sept. 30, or the cost of the transfer
could grow. A Delphi spokesman said there are plans to transfer $1.5 billion in
obligations to GM.
Delphi has been operating under Chapter 11 bankruptcy protection since
October 2005. It spends roughly $12 million to $14 million a month on bankruptcy
lawyers and financial advisers who work on its case.
Associated Press Auto Writer Tom Krisher in Detroit contributed to this
report.
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