GM Parts Spinoff Projects Growth in Non-GM Business

Delphi Corp., the product of a business spinoff from General Motors several years ago, says it is projecting increased business in 2004, primarily due to growth in non-GM customer purchases.
Delphi Corp. provided guidance for its calendar year 2004 financial performance, forecasting cash flow growth of $200 million U.S. and increased sales to non-GM customers during the coming year.
Delphi forecast CY 2004 pro forma earnings of $400 to $500 million or GAAP net income of $280 to $380 million. GAAP earnings figures reflect the ongoing impact of restructuring actions announced in the latter part of 2003, which will continue into 2004. All figures in U.S. dollars.
“Delphi continues to expand its cash generation capabilities and expects operating cash flow to total $1.4 billion in 2004,” said J.T. Battenberg III, Delphi’s chairman, CEO and president. “This strong cash flow will allow us to continue our consistent dividend payments, strengthen our balance sheet, reduce our legacy costs, and further grow our technology-rich product portfolio — all of which will position us to generate greater value for our shareholders.
“Our non-GM revenue is forecast to increase by 13 percent versus 2003,” Battenberg continued. “This sustained growth validates our emphasis on technology, which remains a key strategy for winning new business. Our recent acquisition of Grundig Car Intermedia System GmbH exemplifies Delphi’s use of cash to invest in the expansion of our technology portfolio."
“Overall, we anticipate modest growth across the auto industry in 2004, particularly in mature markets,” noted Alan Dawes, Delphi’s vice chairman and chief financial officer. “The environment will be highly competitive, characterized by intense battles for market share. However, we also foresee strong growth in selected emerging markets and exciting opportunities for technologies that add value for the consumer.” Dawes added, “Because of our technology-rich, differentiating products and our strong global footprint – especially in China and Eastern Europe – Delphi is well positioned for the year ahead. Our challenge will be to rapidly restructure our operations in mature, higher-cost markets and realize aggressive attrition goals to achieve cost reduction targets.”