Oct. 10, 2005 – Just before sweeping new bankruptcy laws take effect, the nationâ€™s largest auto parts manufacturer filed for bankruptcy protection for all US-based units. The move comes as domestic automakers face growing financial problems and threaten to jettison workers while shifting more economic burdens to remaining staff.
Last week, Delphi Corp filed for Chapter 11 bankruptcy even as it offered new incentive packages to company executives, CNN reports. At the same time, the firm continues to seek financial concessions from both the United Auto Workers and former parent company General Motors.
According to the Detroit News, UAW head Ron Gettelfinger was still searching for a way to keep the auto-parts company from filing for bankruptcy as late as last Thursday.
"We have made every effort to keep this company out of bankruptcy; it's our hope that we can reach an agreement to do just that," Gettelfinger told the paper. "It has never been our intention, our goal or our hope that this company go into bankruptcy."
In the United States, Delphi employs around 50,000 people, more than 30,000 who are UAW members, Automotive Digest noted. The company expects to come out of bankruptcy within two years and said it intends "to utilize the Chapter 11 process to preserve the value of the company andâ€¦ resolve Delphiâ€™s existing legacy issue and the resulting high cost structure of its US operations."
In the past, company officials have frequently cited the rising cost of employee health care and pensions as a burden it cannot afford. Discussions with the UAW and GM have reportedly centered on relieving those pressures through union concessions and financial assistance from the motor company.