YOUNGSTOWN Delphi will keep cutting back

Delphi says it expects to earn $275 million next year after restructuring charges.
By DON SHILLING
VINDICATOR BUSINESS EDITOR
YOUNGSTOWN -- Delphi Automotive Systems says it will continue its cost-cutting efforts because it expects difficult market conditions to continue next year.
The company's sales next year are expected to be $25.5 billion, down from this year's expected sales of $26.1 billion.
Delphi, the world's largest auto supplier, has seen a decline in orders from auto manufacturers and it also has been selling some businesses. Sales the past two years have been more than $29 billion.
Delphi, which is based in Michigan, is the parent company of locally based Delphi Packard Electric Systems, which makes wiring harnesses and components and employs nearly 7,000 in the area.
J.T. Battenberg, Delphi chairman and chief executive, said Monday that the company sees increasingly difficult economic conditions in 2002.
Preparation: He said the company has prepared itself for tougher times by reducing its costs and lowering its break-even point.
Delphi is expecting earnings of $275 million next year, up from $220 million to $225 million this year. Excluded from the earnings estimates are accounting charges of $100 million to $150 million in 2002 and $404 million this year. The charges are related to restructuring plans announced in March.
Delphi's plan includes closing nine plants, reducing operations at 40 others and eliminating 11,500 jobs.
Alan Dawes, Delphi chief financial officer, said these steps will be completed by April. So far, seven plants have been closed and 8,500 jobs have been cut, mostly through mutual agreements such as early retirement, he said. Dawes said job-reduction numbers have been increased because the company told employees last week that it was going to cut 1,400 more salaried jobs next year.
European operations: Delphi also will restructure its European operations by consolidating plants and using space better.
Dawes said Delphi plans to complete previously announced portfolio restructuring during 2002.
In December 2000, Delphi said that there were $4 billion to $5 billion of businesses in its portfolio that weren't performing adequately and were subject to possible sale or closure.
shilling@vindy.com