Auto Parts Maker Announces Closure

The bankrupt US automotive parts manufacturer Delphi Corp. announced on February 22 that it plans to close its Puerto Real factory in Cadiz, southern Spain. A union representing employees at the plant has stated that as many as 1,650 workers will be affected by this closure.

The factory makes a range of automotive parts such as shock absorbers, steering wheels and bearings. The CC.OO. (Comisiones Obreras) union has reportedly rejected Delphi’s announcement that it is closing the plant due to accumulated losses in recent years and because the factory’s goods were “not strategic”.

Delphi, a former subsidiary of General Motors, filed for bankruptcy protection in October 2005. The company intends to sell a number of its businesses, including brake and chassis systems, by the end of 2007 under plans to reorganise the corporation and exit bankruptcy. The company’s third quarter financial results, released on February 13, show a net loss of US$2.0 billion for the quarter, compared with losses of US$788 million in Q3 2005.

Upon news of the third quarter results, Delphi’s executive chairman Robert S. “Steve” Miller stated “While Delphi continues to experience substantial losses stemming from competitive pressures in our U.S. operations, approximately half of the third quarter loss was due to charges related to the U.S. employee special attrition programs. Currently, we remain focused on reaching a consensual agreement with our stakeholders, unions and General Motors on a comprehensive restructuring that will enable Delphi’s core U.S. operations to become competitive.”

Delphi representatives in Spain and at the company’s Michigan headquarters in the United States could not be immediately contacted to confirm the Puerto Real closure.