Delphi announces elimination of 6,100 jobs by early next year

Auto-parts maker's costs for cuts mean loss for 1Q

April 18, 2002|By BLOOMBERG NEWS

TROY, Mich. - Delphi Corp. said yesterday that it is eliminating 6,100 jobs, incurring costs that led to a first-quarter loss of $51 million for the world's largest auto-parts maker.

The job reductions, some previously announced, began in January and resulted in $174 million in expenses, Chief Financial Officer Alan Dawes said. The jobs represent 3.2 percent of Delphi's work force of 192,000, and will take place at 25 sites in the United States and Europe.

Delphi is eliminating 17,540 positions, including the most recent reductions, in a reorganization begun in March of last year.

The loss of 9 cents a share narrowed from $429 million, or 77 cents, in the year-earlier quarter. Sales rose 2.3 percent to $6.69 billion as General Motors Corp., Delphi's biggest customer and former parent, raised production to replenish inventories.

The company runs "the risk of this being a perpetual restructuring," said Robert W. Baird & Co. analyst David Leiker, who rates Delphi "market perform." "You've got $700 million in cash that isn't going to shareholders, but is going to reduce the size of the company."

Delphi eliminated 3,300 positions as of March 31 and expects to complete the rest by the first quarter of next year. The company said it expects to save $125 million a year starting in 2004.

Delphi shares fell 27 cents to $15.75.

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