Auto Service World
News   July 16, 2002   by Auto Service World

Delphi to Wind Down Generator Business


Delphi Corporation has announced that it will begin winding down its generator product line business.
Delphi, which refers to the business as its global generator product line, decided on the move after analyzing the business and potential divestiture.
“We are shifting to a wind-down approach that will eliminate all capital spending, engineering expense and general administrative support for the generator product line, except the absolute minimum required to ensure that our customers’ source of supply is not placed in jeopardy,” said Guy C. Hachey, president of Delphi Energy & Chassis Systems division.
Hachey explained that the wind-down plan will include multiple steps including, completing contracts to their agreed upon end date and, in some cases, working with customers to modify existing supply agreements.
In anticipation of either selling or winding down the product line, during 2001 and early 2002, Delphi had previously established reserves to resolve the status of this product line. The company expects that these reserves are adequate to cover costs associated with the wind down.
“We will work closely with our unions, employees, customers and suppliers to ensure a smooth transition for all involved. We will ensure that as we take aggressive steps to minimize the losses associated with this business that we do so while comprehending the value of long-term customer, employee and supplier relationships,” Hachey said. “While these are tough actions, we must continue focusing our management attention and resources on product lines that meet our objectives for growth, profitability and alignment with the company’s strategic vision,” he said.
Delphi’s global generator business manufactures both air-cooled and liquid-cooled belt-driven generators for original equipment manufacturers and the aftermarket. The product line had sales of approximately $500 million (U.S.) in 2001. Approximately 2,000 employees work in five global locations that support the product line.


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