CHICAGO ( Reuters) - Bankrupt auto parts maker Delphi Corp. (DPHIQ.PK) on Tuesday reported a $2.3 billion second-quarter loss on charges related to a program to offer early retirements and buyouts to its U.S. hourly workers.þþDelphi, its unions and former parent General Motors Corp. (GM.N) reached deals to offer attrition programs to thousands of U.S. blue-collar workers in the quarter and are in talks now over proposed wage and benefit cuts for workers who stay.þþThe second quarter included $1.5 billion in charges related to pensions and retiree benefits and $392 million in charges for the buyout portion of its attrition program, Delphi said.þþ``The attrition programs are a step in our transformation; however, we continue to experience losses reflecting an uncompetitive U.S. cost structure,'' Chief Financial Officer Robert Dellinger said in a statement.þþRevenue was unchanged from a year earlier at $7 billion, with about 56 percent, or $3.9 billion, coming from outside GM, up from 51 percent a year earlier.þþFor the first half of the year, Delphi reported a net loss of $2.6 billion on sales of $14 billion, pressured by rising costs of raw materials, routine annual price reductions for parts it supplies and production cuts on key vehicles.þþ``The underlying business has not improved that much in the past year,'' Morningstar analyst John Novak said. ``probably bolsters their case in Bankruptcy Court for the massive restructuring.''þþTroy, Michigan-based Delphi, which was spun off by GM in 1999, filed for bankruptcy protection in October 2005.þþDelphi has said it must cut hourly wages and benefits, which have run nearly three times the level of other U.S. auto parts suppliers under agreements inherited from GM, to reorganize its money-losing U.S. operations.þþIn March, Delphi outlined plans to eliminate about four-fifths of the roughly 33,000 U.S. hourly workers it had when it filed for bankruptcy, 8,500 salaried workers, numerous plants and noncore or unprofitable business.þþThe company has asked the U.S. Bankruptcy Court in New York for permission to reject its labor agreements and impose the cuts it seeks should a settlement not be reached.þþUnions have threatened to strike if Delphi were to impose cuts, potentially threatening production disruptions at GM and other Delphi customers that could cost billions of dollars.þþA hearing into Delphi's request was suspended in June and is scheduled to resume Thursday with testimony from witnesses from the United Auto Workers.þþLast week, Delphi delayed the hearing for more talks with unions and GM aimed at a settlement. GM expressed optimism that an agreement could be reached, while the UAW said talks the past two months had been disappointing at best.þþAnalysts have said the retirement programs with the UAW and the International Union of Electrical Workers-Communications Workers of America could reduce the likelihood of a strike.þþRoughly 12,500 UAW workers, about 85 percent of those eligible, accepted retirement or early retirement offers and 5,000 more may return to work at GM, out of about 24,000.þþMore UAW workers are eligible to consider offers until mid-September under an extended agreement in June, and the entire group is eligible for various buyout offers.þþAbout 3,200 IUE-CWA workers were eligible for retirement or early retirement offers and 7,500 were eligible for buyouts. Details are expected later this week.þþ
Source: NY Times
