IUE official optimistic about Delphi ownership

By Don Shilling | June 5, 2009 at 12:00a.m.

YOUNGSTOWN — A union official is optimistic that local Delphi Corp. plants would succeed under the ownership of a California investment firm.

“This will open the door for new business,” said Tom Krolopp, shop chairman of Local 717 of the International Union of Electrical Workers.

Delphi, a Michigan-based auto parts supplier, said Monday that it has an agreement to come out of bankruptcy court under the ownership of Platinum Equity. The deal must be approved by a bankruptcy court judge.

Since filing for bankruptcy in 2005, Delphi has been struggling to find enough financing so it can operate as an independent company.

“A lot of people are apprehensive about doing business with a company in bankruptcy,” Krolopp said.

Krolopp said he expects that Platinum executives would be hands-on owners who would help Delphi succeed.

Platinum was formed in 1995 and has since completed more than 100 acquisitions of companies for corporations such as General Electric, AT&T and IBM.

As part of the deal with Platinum, General Motors has agreed to take back five of Delphi’s parts-making plants. None of them are part of Warren-based Packard, which produces components for vehicle wiring systems.

GM, which filed for bankruptcy protection Monday, used to be the parent company of Delphi.

Krolopp said it won’t be known for some time whether it would be better to be part of GM or the new Delphi operation.

“We’ve gone through our bankruptcy. They are just heading into theirs,” he said.

Delphi has made so many cuts that the local Packard operations will be profitable if car sales pick up, he said. Some business lines already are profitable even at the current levels of reduced sales, he said.

After the bankruptcy filing, Packard shuttered much of its local operations and trimmed the hourly work force from 3,800 to less than 1,000. Wages and benefits also were reduced.

Delphi’s plan calls for some local Packard plants to be left with a holding company that would sell them. Krolopp said, however, that these would be plants that are already closed, such as Packard’s plants on Dana Street in Warren and in Cortland.

Local 717 now has 600 active workers and 150 on layoff.

About 250 of the active workers are new hires who were brought on at a lower pay scale that was created after the bankruptcy.

New workers earn hourly pay of either $11.33 or $11.68, depending on where they work.

Longtime workers have had their pay reduced from $28 an hour to $17 an hour. Skilled-trades workers had their hourly pay cut from more than $30 to $26.

shilling@vindy.com