Delphi considers filing for bankruptcy protection
Monday, August 8th 2005, 10:31 am
By: News On 6
TROY, Mich. (AP) _ Delphi Corp. _ which employs about 10,000 workers in Ohio _ said Monday it will consider filing for bankruptcy protection after falling to a second-quarter loss from a year-ago profit.
The nation's biggest auto-parts maker said it is being hurt by production cuts among domestic automakers and the growing cost of labor and materials.
The company _ which on Friday said it has begun to draw $1.5 billion from a $1.8 billion revolving credit facility _ said it will consider filing for bankruptcy if it fails to come up with a plan resolving the high costs of doing business and its liabilities.
Delphi on Friday also said it is in talks with former parent General Motors Corp. and its main union, the United Auto Workers, in an effort to avoid bankruptcy.
Delphi employs about 4,550 hourly workers in Dayton, 3,800 in Warren, 900 in Sandusky and 750 in Columbus.
The Troy, Mich.-based company, which was spun off from GM in 1999, lost $338 million, or 60 cents per share, in the second quarter versus a prior-year profit of $143 million, or 25 cents per share. Revenue fell to $7 billion from $7.5 billion a year ago.
Wall Street had projected a loss of 51 cents per share, the average forecast of 18 analysts surveyed by Thomson Financial, on estimated revenue of $7.14 billion.
Cash flow used in operations during the quarter totaled $305 million, including $625 million in pension contributions, compared with cash flow from operations of $549 million in the year-ago quarter.
For the current quarter, Delphi forecast a continued decline in North American production and negative cash flow from operations, on projected revenue between $6.1 billion and $6.3 billion.