Delphi Files Chapter 11

Automotive supplier Delphi has filed for chapter 11 bankruptcy protection. General Motors, Delphi’s former parent company will bear the brunt of the collapse because it could be liable for up to $11 billion (£6 billion) worth of pension and retirement benefits for about 25,000 Delphi employees.

Delphi, which supplies suspension systems for the Mini and Range Rover Sport and cruise controls for Jaguar, was forced to seek bankruptcy protection in a New York court after failing to win concessions with unions. The United Auto Workers union resisted its attempts to cut hourly wages by more than half, to about $10 or $12.

According to an Independent report, Delphi’s chapter 11 filing is one of the largest corporate failures in American history and the third large US parts supplier to file for bankruptcy protection this year. The bankruptcy does not include its operations outside the US, which means that British pensioners in its UK pension scheme will not be hit by its collapse. Delphi employs 4,000 workers at 10 sites in the UK and 185,000 people worldwide, including 50,000 in the US.

Although accounts filed at Companies House show that Delphi’s UK pension schemes were in deficit to the tune of £2 million under FRS17 in 2003, the group’s chief executive, Robert Miller, promised last month that UK employees would not be affected, the newspaper added.