Auto-Parts Maker Delphi Cuts Jobs

DETROIT (AP) -- Delphi Corp., North America's largest auto-parts maker, announced Wednesday it planned to cut another 6,100 jobs, or 3 percent of its work force.

The cuts came as the former General Motors Corp. subsidiary announced it sharply reduced its losses in the first quarter and said it was starting to see results from earlier cost cuts.

"It's not exactly a boom here, but it looks like we've seen the bottom here and are coming out," chief financial officer Alan Dawes said.

Delphi announced last year that it would eliminate 11,000 jobs as part of a restructuring effort. Including the cuts announced Wednesday, the Troy-based company said from 2001 through the first quarter of 2003, it expects to eliminate 17,540 jobs in all -- about 9 percent of its worldwide work force of 195,000.

Delphi took a pre-tax charge of $262 million for the upcoming cuts in the latest quarter.

Dawes said the cuts are starting to pay off. Excluding nonrecurring items, the company reached a 1.8 percent profit margin in the first quarter, though still short of its goal of 5 percent.

The job cuts were announced as the company reported that its first quarter losses narrowed to $51 million, or 9 cents per share, from $429 million, or 77 cents per share, in the same period last year.

Excluding $262 million in pretax restructuring costs, Delphi would have earned $123 million, or 22 cents a share, in the 2002 first quarter. That compares to a loss of $20 million, or a 4 cent loss, on the same basis a year earlier.

Wall Street analysts had forecast earnings of 21 cents before restructuring costs, according to Thomson Financial/First Call.

Sales turned around in the quarter, rising 2.3 percent in the three months ending March 31 to $6.69 billion from $6.53 billion. It was the first quarter in seven in which Delphi sales increased from the same quarter a year earlier.

Noting that 67 percent of its sales were to GM, Dawes said he expects steady, but not dramatic, progress in its effort to increase the non-GM share of its business, with a goal that non-GM sales will to grow to 35 percent for all of 2002.

Delphi said it benefitted from increased auto production in the latest quarter but confronts a tough business environment.

"There are still significant cost pressures. In the U.S., the biggest cost pressures are in health care and in pensions," because of losses in its pension funds' investments, Dawes said.

Delphi shares fell 23 cents to $15.79 in morning trading Wednesday on the New York Stock Exchange