Four years ago, the world’s largest auto parts company filed for bankruptcy protection and became the most explosive news at the time. He is not a lesson for the outside world, and the real reason for miraculous recovery.

On October 6, Delphi announced the end of its four-year bankruptcy protection process.

The bankruptcy protection provisions of the United States are really like a steelmaking furnace.

Today, when GM is still in the "refining process", Delphi, which was declared bankruptcy-protected four years ago, has already climbed out of it. This is the "general old part of the world that once held the throne of the world's largest auto parts company." "I came back with a brand new look.

Just two months ago on July 29, Jiang Jian successfully completed his mission and returned from the United States to China. The deputy general manager of Delphi Group (China) Investment Co., Ltd., who has worked for Delphi for 13 years, was transferred to Delphi's headquarters in charge of public relations during Delphi's bankruptcy protection in June 2007.

Looking back at the past two years of working experience in the United States, Jiang Jian has a lot of emotions. He personally experienced the great journey of Delphi from dying to new life. In his view, “It was a thrilling two years.”

The world’s auto industry has never had a miracle, but few of its stories are more legendary than Delphi. This once was the world's largest auto parts company, and what it has experienced in just a few years is very meaningful. And the story about it has already begun.

Decline

"The success or failure of Delphi even indicates the future of the American auto industry." Five years ago, bankruptcy protection caused many American companies to place such expectations on Delphi. In fact, in Delphi’s history of more than 100 years of development, the relationship with GM can be described as interdependent. Even to some extent, the history of Delphi is the history of GM.

From the 1930s to the early 1980s, GM was the most frequent stage of mergers. In the merger and acquisition formed a huge scale effect, and ultimately make GM become the world's largest position can not challenge the biggest auto companies. At that time, Delphi was also incorporated into GM's vertically-integrated structural strategy, where everything from screws to engines was done by itself. There is no doubt that GM’s success was also attributed to the stable supply of spare parts at the time.

However, the competitive landscape began to change in the early 1980s. After the oil crisis, the impact of the Japanese auto industry, coupled with the cyclical laws of the automotive industry, many parts and components companies are not scale, the general parts supply system is increasingly fatigued, desperation had to decide to give up the vertical structure , And gradually separate the parts with relatively low profit margins.

GMACG (General Motors Components Group), the predecessor of Delphi, is the product of this grand background. The purpose of GM's move is simply to allow GMACG to supply other automakers such as Ford and Chrysler on the basis of meeting common needs.

However, the embarrassing thing followed. When GMACG's business people carried business cards printed with “GM” (universal) to other companies to promote their business, they were repeatedly rejected. Obviously, it is unrealistic for other OEMs, such as Ford and Chrysler, who are naturally hostile to the term "GM," to accept the supply of competitors.

At that time, solving the troubles of "business cards" became a particularly pressing issue for GMACG. In order to better open the situation, in 1995, ACG changed its name to Delphi Automotive Systems. At that time, the team led by JT Battenberg, the founding chairman of Delphi, had fully realized that the development of parts and components from the vehicle industry would be a better development and it would be a trend.

In addition to this, while developing non-universal business, Battenberg made drastic changes to Delphi, such as shrinking the product line, identifying several major businesses, and stripping unimportant product lines until 1996. More than 270 product lines have been shrunk to more than 170, making the product more competitive.

This is not enough. Delphi must be completely out of GM. Battenberger, who has done a lot of work in the early stages, seems to be waiting for an opportunity.

On May 28, 1999, Delphi officially separated from General Motors Corp., becoming a completely independent company that was publicly listed on the New York Stock Exchange. At the same time, GM also thrown all the shares held by Delphi.

At this time, Delphi’s sales amounted to USD 27 billion to USD 28 billion, making it the absolute largest auto parts company in the world. Parts companies such as Visteon and Bosch had sales of about 20 billion U.S. dollars. Shortly afterwards, Visteon was also dismantled from Ford Motors, which undoubtedly proved the correctness of Battenberg's original decision.

Although Delphi has completely divested from GM, 80% of the turnover is still brought by General Motors. The bigger risk is that afterwards, this time the separation was not complete, and a big burden on Delphi has still not been unloaded.

The reality created by history is that most of the GM employees are members of the UAW (American Automobile Workers Federation). Similarly, Delphi, who was once a part of the General Motors, operates mostly in the same way. In 1999, when the product line was separated from General Motors, North America accounted for 60% of the world's 180,000 employees. At that time, General Motors was Delphi’s largest customer, so Delphi had to take GM’s previously signed high-wage contracts together. To be extended until September 2007, it made Delphi "congenitally inadequate" in cost competition.

“Labor costs have become a hidden danger for Delphi almost suffocating in the future.” Jiang Jian said that by 2002, this contradiction began to erupt. At that time, the North American market had shrunk sharply, GM’s sales had fallen sharply, parts purchases had been reduced accordingly, and Delphi’s production was insufficient. Need to cut staff.

Although according to the previous split agreement, these retrenched workers can be returned to GM, but because GM's own sales in North America fell sharply, they do not need so many workers, and the UAW contract states that they cannot lay off workers. Next, Delphi had to put these people into JOB BANK (job bank) unconditionally. Therefore, even though these idle workers did not work, Delphi still had to pay nearly 90% of their wages.

Worse, UAW members are the highest paid in all industries in the United States, and this is due to the fact that the US auto industry has flourished for more than 60 years. It was not unreasonable that UAW tried to gain reasonable economic benefits for union members. Now, the car The industry is no longer in good shape. The profits of vehicle companies have been shrinking year by year. However, UAW has continued to demand a high profile for its members to increase salaries year by year. At the same time, as the retired employees of old companies have accumulated more and more, a large number of pensions and medical insurance benefits must be paid. “Can you imagine that? With the continuous pressure from automakers (including GM) to reduce procurement costs, while providing UAW members with the same gratuity, pension, and medical insurance as GM, Delphi’s large profits are thus Erosion is lost." Now that we have talked, Jiang Jian still has a fear.

Under this circumstance, if Delphi has to "independently" compete with other parts companies, it will first lose a few cents in cost. These workers who work at Delphi are treated better than other companies of the same type, even higher than the entire vehicle. The wages of the workers in the factory, whose hourly wage is 27 to 28 US dollars, combine their welfare benefits, and the workers can get an hourly wage of 75 US dollars. The competitors are not as lucky as Delphi's workers. The labor cost is half that of Delphi, plus benefits. You can only get an hourly salary of around $30.

"At that time, Delphi had to pay $300 million to these unused workers in JOB BANK." Jiang Jian said. The black hole is getting bigger and bigger, and the industry has entered a trough adjustment period.

By the second quarter of 2005, Delphi delivered an ugly report: a huge loss of 338 million U.S. dollars; a sharp contrast with the net profit of 143 million U.S. dollars in the same period last year. [next]

Miller came

Like many American disaster catastrophes, there will always be salvation heroes at the right time. "Deeply ill" Delphi needs such a hero.

At this point, JT Battenberg faced retirement, and Delphi’s job of finding his successor had lasted for more than six months. Steve Miller appeared just at this time. Just like Hollywood blockbusters, everything will be dominated and changed by him.

Steve Miller, known as the "Saving Expert," had drafted the "Lending Guarantee Act" for Chrysler as early as 1979 and negotiated with 400 lending institutions and the U.S. government on this troubled car. The company implements assistance.

In 1993, after leaving Chrysler, Miller began his career as a director of the company. In the following ten years, he returned to the private company as a full-time manager for nine times, leading several companies’ recovery plans. Prior to joining Delphi, Miller served as non-executive chairman of Federal-Mogul Corporation and served as director of four other listed companies in various industries, including Waste Management, Symantec, United Airlines, and Reynolds USA. Miller, 63, is undoubtedly considered to be a "lifeguard" type of player handling the business crisis.

In July 2005, Delphi’s board of directors announced that Steve Miller succeeded JT Battenberg as the company’s new chairman and chief executive officer.

In fact, the board’s original designated successor was the current CEO O’Neill. At that time, he was not step by step to the CEO. Obviously, Delphi’s board of directors placed a scrutiny on Miller’s experience of executives across large vehicles and parts companies. Great expectations.

At the beginning of his term, Miller began an intensive investigation. Miller made a judgment on the overall situation faced by Delphi. He believes that Japanese and Korean companies have continued to erode the share and profits of the North American market in the past 30 years, which has caused the market share of the Big Three in the United States to shrink, and GM has produced and sold in the North American market. The gradual decline in the number of consecutive years led to a reduction in the number of factories, directly dragging down many suppliers such as Delphi. In addition, when Delphi got out of General Motors, it took a large number of supporting companies to collect all the orders. Many professional supporting companies appeared to be weak in entering open market competition and gradually became Delphi's burden. Some internal business enterprises have been dragged down by many well-run businesses, and they can only obtain partial relief by constantly cleaning up and selling off some of the assets that are not competitive.

However, the ultimate root cause is still a problem left over from the common “separate cooking”, and Miller has a clear understanding of this. “It's very simple. We have lost our competitiveness. We will not be able to maintain this for a long time. We will not solve the labor problem.” The company is finished."

As of August 31, 2005, Delphi’s assets were US$17.1 billion and its liabilities were US$22.2 billion, of which unlicensed large creditors were General Motors, Flextronics Asia Pacific, Freescale Semiconductor, Robert Bosch, and Siemens. Automobile company and so on.

In this case, Miller seems to have no choice.

Miller must make a bold decision, let Delphi shock, and then implement his usual methods to let Delphi reborn.

On October 8, 2005, Delphi officially filed for bankruptcy protection.

According to Chapter 11 of the U.S. Bankruptcy Law, Delphi’s proactive application for bankruptcy protection is equivalent to placing Delphi in a “protection chamber” during which Delphi will be frozen for debts up to October 8, and creditors will be protected. You cannot interfere with day-to-day operations at will. The bankruptcy protection period is one year. If the reorganization is not completed after one year, it can apply for further extension.

During this period of protection, Delphi also has time to make adjustments and reorganization, financing and selling some bad business. In addition, after applying for protection, the board of directors and leadership can still continue their daily work.

Delphi’s application for bankruptcy protection was the most explosive news in the auto industry. To find out, Delphi ranks 63rd in the Fortune 500 list of US top 500 companies. Before 2005, Delphi has consistently ranked first in global spare parts companies.

With more than 185,000 employees, Delphi has 171 wholly-owned manufacturing facilities, 42 joint venture plants, 53 customer service centers and sales offices, and 33 technology centers in 41 countries. There are also 11 production facilities in China. enterprise.

Now that Delphi has such a large system, the word “bankruptcy” is linked together, which inevitably makes many people involved in Delphi start to worry. Jiang Jian, deputy general manager of Delphi Group (China) Investment Corporation, is responsible for marketing and public relations. From the beginning of August 2005, Jiang Jian had to frequently explain to the media and customers how Delphi’s “bankruptcy protection” was, and how bankruptcy protection was different from bankruptcy liquidation.

"Delphi will still come out of bankruptcy protection, and Delphi will return." Jiang Jian explained this over and over again. [next]

Difficult labor negotiations

The decision to make bankruptcy protection is not undetermined, but the real test that Miller faced then began. There are five necessary questions in front of him that require him to do it correctly.

The first is the labor issue; the second is the historical contract issue with GM; the third is the issue of employee pension; the fourth is the issue of reducing operating costs; and the fifth is the issue of product rationalization. The premise of solving these problems is that Miller also needs to find a reliable consortium to provide funds to tide over the difficulties. In fact, preparing enough money is not difficult for Miller. He had previously successfully dealt with such an inconvenience.

These five topics are the first and foremost challenge for Miller to solve the labor problem. This problem is solved and the problems behind can all be solved. However, it is also particularly difficult because of its importance. Because the front side is facing a hurricane that can't be bypassed by him - UAW, this seems to be today, whether it is Chrysler or GM, this is the stubbornness of their decline.

After a stormy and brave Miller began to attack the American automobile industry. What is urgently needed to solve is labor negotiations. This is seen by Jiang Jian as a hard nut, but it must be squashed. It was later proved that only this negotiation lasted two years and one can imagine how hard the bone is.

In mid-November of that year, just after applying for bankruptcy protection, Miller proposed a plan to amend the wages, trying to reduce the hourly wages of workers from US$27 to US$10 to US$12.5. This was rightly met with fierce opposition from the UAW. They think this is unfair. Workers also began to protest around the demonstrations and even threatened the strike.

At the same time, the workers seem to have seized Miller's nephew, and Delphi’s generous bonuses to executives are commonplace in Delphi's bankruptcy protection.

It turns out that companies that perform bankruptcy protection generally have a common practice. In order to retain senior management personnel, these senior officials must sign agreements and continue to give them high bonuses and salaries, so as not to find another place or be excavated.

According to the new dismissal agreement, Delphi's 21 executives can receive 18 months of wages and at least a portion of their dividends before the new pay reduction clause is announced. In exchange, these executives must sign an agreement promising not to work for their competitors within 18 months. Delphi also asked the court to pass a bonus plan for its senior executives. If the company goes out of bankruptcy, it will pay stocks and cash dividends to its hundreds of employees.

Delphi's original price for Miller was also huge, with an annual bonus of $3 million plus annual salary of $1.5 million, and other executives also have different levels of high bonuses.

Workers grasped this point. They were angrily convinced that it was unfair for workers to reduce their salaries and give executives such high salaries and bonuses.

Both sides to his Majesty, Miller made a decision, before the company out of the shadow of bankruptcy, the basic salary of their annual salary from 1.5 million to 1 US dollars, from January 1, 2006 began to implement. However, the move still made the workers indignant. They even used the slogan “Miller is not worth a dollar”.

Driven by Miller, other Delphi executives also voluntarily reduced their pay. At this point, the company also plans to cancel the previous plan to provide $ 519 million in dividends to the company’s 600 executives.

Jiang Jian recalled to the “Car Watch” reporter that the long labor negotiations were also mingled with General Motors and UAW. Just like the Westerns, the three parties pointed guns at each other. "Delphi thinks I'm not working right now, so I'll drag GM down, so I have to give UAW employees a pay cut, and UAW thinks that to protect the interests of workers, we must take extreme measures to strike. The obvious fact is that Delphi is GM died, so General Motors became a big player and the three parties were complicated."

In 2007, the negotiations finally came to an end. Delphi paid compensation targets set at the same level in the industry. Among them, GM also made a lot of concessions and support, such as compensation for workers for a common period of time.

Of course, any reformist will face criticism and even embarrassment. Miller must also bear these hardships.

Someone inside Delphi has hated him and others are extremely respectful to him. Jiang Jian admired the boss's speech. "Miller was the first person to dare to throw this long-term survival problem, which means that even if the workers who trim the turf at the entrance are all paid for $75 an hour, the American auto industry will be finished. Miller was back then. Prophecy is not just about Delphi going bankrupt. The entire GM will be bankrupt. Now it is just like what he said.” In Jiang Jian’s view, Miller’s view was very forward-looking.

In June 2007, Jiang Jian was transferred to Delphi’s US headquarters to handle public affairs. From the prosperous business of China to the United States, Jiang Jian felt a great gap, because in the Chinese market, Delphi announced to the outside world is generally happy to set up a factory and sign a contract. After he arrived in the United States, he had to deal with one by one. Information is such bad news as layoffs, production cuts, closing factories, and so on.

“The team I lead is much older than China at the time when I was in China. I am generally over 50 years old. The average age of the company is also about 50.” Jiang Jian told the “Car Watch” reporter that the automobile industry is The United States is not an industry for young people. It was a sunrise industry in the 1970s and there are now fewer young people. Their job in GM is to do a lifetime. From the time of training, they are credited to the length of service, and the retirement conditions are very rich. They have the benefits of pension medical insurance. After retirement, they can enjoy a very good retirement treatment.

Now that Delphi is undergoing new changes, these employees are angry. The fact that they can't accept them is that they can no longer get the salaries and benefits that they were supposed to receive. "We have been cheated, deceived all my life!" This statement has so far made Jiang Jian unforgettable.

Upon receiving the notification, Jiang Jian had to lay off one of the five individuals in the department. This is a 55-year-old employee who is about to retire. If this is before Delphi seeks bankruptcy protection, he will be able to enjoy a uni- versal treatment through the universal scoring system. He can enjoy both full benefits and a year. The salary goes home.

However, when Jiang Jian handled the documents and signed the contract, the company has already started to change the labor system. They think the compensation is too high. “Why should we pay them more than other companies in the industry?” The last old employee Holding only the past half of the 6-month compensation went awry.

"It's hard, but it has to go through." Those days were very difficult for Jiang Jian. The same is true for other people. When Delphi entered bankruptcy protection in 2005, there were more than 180,000 employees and there are only about 100,000 employees worldwide. . [next]

VC

While embarking on labor issues, Miller’s team is also constantly seeking the support of the consortium.

Initially, with the ability of Miller to mobilize wind and rain in the financial sector, and the automobile industry entered a rising cycle, North America’s car production was 16 million to 17 million vehicles. At that time, private equity funds were also in the limelight. Delphi was the largest zero. Component manufacturers do have a certain amount of charisma. Many VCs are optimistic about the future of Delphi. For a time, Delphi has even become a fragrance.

At that time, Delphi was interested in Appaloos aManagement and Cerberus Capital Management. In addition, a number of powerful consortiums also joined Delphi in the fight for Delphi's second-largest shareholder - the hedge fund Highland Capital also intends to propose a Delphi Board of Directors A $4.7 billion capital injection plan to replace the capital injection of several other funds.

Finally, on December 28, 2006, Delphi issued a statement saying that it has received a capital injection commitment from an investment group led by two private equity funds, Appaloosa Management and Cerberus Capital Management. According to this commitment, the investment group will purchase preferred shares and common shares. The way it injected $3.4 billion into it to help it out of bankruptcy protection. According to informed sources, the investment group also includes the Harbinger Capital Partners private equity fund, Merrill Lynch Bank and UBS Securities.

Everything looks to be going well, and Delphi is about to make a historic turn, which is also closer to the goal of Miller’s initial restructuring of its US operations from early 2007 to the middle of the year.

However, a very dramatic scene emerged. It was enough to make Miller fall to the ground.

Delphi eventually chose Appaloosa Management as its investor. In the morning of April 2007, hundreds of people gathered in a conference hall in New York City. The atmosphere was filled with joy and the signing ceremony began. Surprisingly, left and right did not see Appaloosa Management's signings. After learning about it, I learned that at 7 am, Appaloosa Management sent a letter to Delphi saying that they would withdraw from the capital injection and even pay a lot of liquidated damages.

When the news came out, everyone was upset.

In fact, as the venture company's Appaloosa Management, its withdrawal also has its own reason. In 2007, oil prices soared rapidly. The highest price was $140 per barrel. General Motors sales of better-selling SUVs began to decline, and Delphi was also affected. For venture capital, the unstable factors are too great, and there is no way to finally give up.

However, according to Jiang Jian, the withdrawal of Appaloosa Management at the last minute is not a bad thing, because even if it signs a contract with Delphi, it will mean that Delphi stepped out of the bankruptcy protection process and is no longer protected. The financial turmoil will again knock down Delphi.

Because the market was not bottomed out at that time, if the plan was not reached at the time, liquidity problems would still arise and Delphi would once again enter bankruptcy protection. [next]

General shots

Seeing that there is no hope of financing in the venture capital market, Delphi still has to rely on the help of GM.

As a result, GM launched a series of buybacks for Delphi. According to the acquisition plan, GM will occupy more than 80% of shares in New Delphi. However, GM agrees not to have an absolute advantage in the board of directors. The GM and creditor committees appoint two directors, and then the two parties find two independent directors. Finally, these eight individuals jointly appoint the ninth independent director.

The GM-restructured Delphi program includes Delphi's global turnaround business, plus Delphi’s four plants in the United States. This business will be 100% taken away by General Motors. New Delphi will no longer own this business. At present, this business has been approved by relevant countries in the world through anti-trust procedures, and the U.S. government and the European Union have also approved the business. The Chinese Ministry of Commerce also passed the approval in August. In addition, Delphi’s bad assets in the United States include discontinued factories and equipment. This part of the assets will remain in old Delphi, pending the proper handling of assets. In addition to the above two items, all Delphi's business remains, namely the restructured "New Delphi", which includes Delphi's operations in China, Asia, and Europe. This is also the part that is currently pending approval by various countries.

Since Delphi has business in the global market, GM's repurchase of Delphi has also aroused the awareness of related companies in other countries. In September this year, in response to GM’s acquisition of Delphi, an auto parts manufacturer, the relevant members of the China Automobile Dealing Industry Association, Hejun Venture Consulting Group (a member of the Advisory Committee of the Association) and the Institute of Transnational Business Law of Renmin University of China expressed Concern over this matter, and hope that the Ministry of Commerce will take sufficient time to investigate the possible impact of this merger on Chinese cars.

According to the tripartite person in charge of the China Automobile Circulation Industry Association, Delphi’s parts revenue in China is currently US$1.8 billion, accounting for 25% of China’s high-end parts and components market. If Delphi changes from an open operation to a general-purpose closed ancillary supporting industry, it will fundamentally change the parts procurement policy of General Motors. In order to protect the interests of its subsidiaries, General Motors will give priority to even statutory mandatory procurement of Delphi products.

“The protectionism formed by GM’s merger with Delphi has caused great damage to China’s auto parts companies. They will gradually lose the market for GM.” The relevant person in charge said. On August 31 this year, GM and Delphi formally submitted an anti-monopoly application to the Chinese Ministry of Commerce. However, this matter was quickly responded to by the Ministry of Commerce of the People's Republic of China. On September 28, the Chinese Ministry of Commerce issued an announcement stating that, after review, the acquisition may have the effect of excluding or restricting competition, and it decided to impose additional restrictive conditions for approval.

Then, on October 2nd, GM also obtained approval from the European Union's antitrust agency, saying that GM could acquire some of the assets (moving electronic components and transportation systems) of Delphi, the US auto parts manufacturer that has filed for bankruptcy protection.

For GM currently acquiring Delphi four plants and steering systems business, and investing $1.7 billion in the newly established Delphi Investment Limited Partnership, will GM regain control of Delphi and Jiang Jian denies it, saying that GM may not necessarily be Delphi's long-term investors. Delphi and GM signed an operating agreement. GM does not participate in Delphi's day-to-day management. In addition, Delphi supplies products to global companies. If some decisions are related to generic competitors, GM must evade it.

Jiang Jian told the "Car Watch" reporter that GM had to buy back Delphi when he couldn't guarantee the situation. This was also a frustrating move. Without GM saving, Delphi would continue to fall into the quagmire and GM's interests would suffer. On many occasions, GM stated that they are not interested in parts and components business.

In his opinion, GM may take additional measures to deal with this part of the assets. In any case, Delphi has finally gone out of bankruptcy protection, it will begin a new journey, but also waiting for the same fate of the general freshman.

While financing, Miller is also addressing Delphi's product line issues. Delphi announced that it will adjust the company's product structure to focus on the core technology areas where the company has a large competitive advantage and can provide customers with maximum support.

For this reason, during the period of bankruptcy protection, Delphi stripped many businesses, including the exhaust system and automotive interior business. Now it will concentrate its main business on electrical and electronic powertrains and heat exchange systems. Analysts believe that this step is necessary for the long-term steady development of Delphi.

Delphi, who continues to ban Baobao, is still looking for buyers. Its steering, chassis, etc. will also be sold. Earlier they had successfully sold catalysts and door modules, and brakes and suspensions have been signed with Jingxi Heavy Industries of China. protocol.

In addition, Miller continued to make efforts to continue Battenberg’s strategy of “going to generalize”. When it was separated from General Motors, 80% of Delphi’s turnover was brought by General Motors. Miller now has Reduce this ratio to 50%. Because after becoming an independent parts company, the trust level is also higher than before. In addition to exploring new markets for automotive technology, Delphi has also started to do non-automotive markets, such as after-sales service, which was previously done by GM.

Delphi plans to make 30% of business in North America, Asia, and Europe, and the other 10% from South America. In an interview on October 8th, Rod O'Neill, President and CEO of Del.com, stated that "by next year, any customer will not exceed 15% of Delphi's sales. ”

Of course, out of Delphi after bankruptcy protection, this time already light battle, O'Neal's tone is also very relaxed and confident. [next]

Reappear

Despite the hardships of the Delphi reorganization process over the past few years, they have never been interrupted because of their own reasons.

On October 8, when Delphi announced his protection from bankruptcy, many Delphi partners called to congratulate him. At that time, Jiang Jian had returned to China for more than two months. His current identity is Delphi Asia Pacific and Delphi Electronics. The director of public affairs and marketing of the Security Division is still working in Shanghai and is still doing his business. Everything is fresh and familiar.

Delphi’s funds were borrowed from the consortium when he was bankrupted. When they saw the market bottomed out, Delphi’s investment value also showed up. The $3.5 billion loaned at that time was no longer able to be repaid. The creditors removed this portion of bankruptcy loans in the form of debt-to-equity swaps and will invest $900 million in new companies.

"We were able to come out at this time, to a large extent, because creditors have completely removed our claims and entered new funds, so our financial situation is very healthy." Jiang Jian said. Although the industry environment and the competitive environment will continue to be severe, it is certain that the restructured Delphi has been “immune”. After a series of spin-off Delphi, it is becoming a more flexible, lighter, more adaptable company. . [next]

Reasons for the decline of Delphi's out of bankruptcy protection

Delphi’s labor in the United States is a member of UAW. The wages, benefits, and medical insurance of these workers are as high as US$65 per hour, which is almost three times the wages of non-union workers in the same industry, and they are much higher than those of other union members. Negotiating with UAW to completely solve the problem of high wages and high welfare for workers. Ultimately, the wage level fell to the industry average. From Miller can see how important a senior bankruptcy protection expert is. Delphi has set a new model for the entire industry, which is to reduce the number of employees and the production capacity of the United States, and to reduce the salaries and benefits for those who stay.

GM reached an agreement with the union when it went out of its way to establish Delphi, which stipulated that Delphi could not change the high salary and benefits of UAW. In exchange for Delphi’s approval, GM also used the supply and sales contract as an exchange. This has caused Delphi to be less competitive in the market, relying on common charity. As the general market share fell sharply year after year, Delphi eventually made ends meet. Seek support from the consortium and raise funds as funds for Delphi's restructuring and adjustment. After GM repurchased Delphi’s assets to obtain funds and development, it was supported by the consortium in the foreseeable future. It not only removed debts of 3.5 billion U.S. dollars in the form of debt-to-equity swaps, but also received 900 million U.S. dollars. Injection.

When GM and Delphi split up, they originally intended to increase the productivity of Delphi. The redundant workers would “backflow” to GM because GM expects that there will be many workers retire. It should have enough capacity to absorb Delphi’s redundant employees. However, things were counterproductive and GM’s market share had fallen much faster than expected, and there was no way to solve the problem of redundant staff. In the past few years, Delphi had 4,000 workers who did not work every day and still got a high salary. They can't be cut off. Only the 4,000 can't get rid of superfluous salary. Delphi needs to spend more than 400 million US dollars every year. Strip off non-core businesses including exhaust systems and automotive interiors. Focus energy and resources on profitable businesses, including electrical and electronics, powertrains, and heat exchange systems. At the same time investing in research and development costs, maintaining the industry's technology leadership.

In addition, efforts have been made to develop customers outside of General Motors and to open up markets outside of North America, especially emerging markets in Asia, to ensure business growth.

In addition to the large amount of internal friction caused by labor problems, it also suffered a rapid decline in business volume and rising costs caused by rising raw materials, which eventually led to the collapse of the capital chain and a large number of losses. Regardless of how difficult it is during the adjustment period, it does not affect the related supporting companies, stabilizes customers and wins the trust of customers, and lays the foundation for quickly entering normal operations after going out of protection procedures.