Salaried Delphi retirees could lose health care

By Don Shilling

The company said it understands that ending benefits ‘will impose real hardship.’

Delphi Corp. is seeking to cancel health care and other benefits for its salaried retirees.

The auto parts supplier, which has many salaried retirees in the Mahoning Valley, filed a motion in bankruptcy court that seeks the authority to make the change April 1. The move would save the company $200 million between this year and 2011, the motion said.

Delphi said it had intended to maintain retiree benefits early in its bankruptcy case but can no longer do so because of the deteriorating value of its business.

It said a business plan filed with the bankruptcy court in January 2008 valued the company at $12.8 billion. Financing for that plan fell apart, however, so Delphi has been unable to emerge an independent company. Reports in October placed the value at about $7.2 billion.

The company said a steep decline in auto sales, along with a global recession and depressed stock prices, likely will lead to a lower value for the company in the future.

Delphi noted that it understands that ending health care and other benefits “will impose real hardship” on those who receive them. It added, however, that keeping them in the business plan can no longer be justified.

Canceling the benefits will remove $1.1 billion in liabilities from Delphi’s balance sheet.

Included in the proposed cuts are health coverage for current and future salaried retirees, Medicare Part B coverage for them, a 1 percent employer contribution to a salaried retirement savings program, and life insurance benefits.

Delphi is the parent of Warren-based Delphi Packard Electric and has been operating under bankruptcy court protection since 2005. Delphi Packard produces wiring harnesses for vehicles.

Delphi has 15,000 salaried retirees throughout the company.

A company spokesman could not be reached to talk about the number of retirees in the Mahoning Valley.

In 2007, Delphi Packard had 900 salaried workers on the job but it used to have more than 2,000. Recently, the company has declined to provide the number of its salaried staff.

shilling@vindy.com