Delphi Completes Sale of Battery Product Line to Johnson Controls Inc.

TROY, Mich., July 1 -- In line with its ongoing portfolio- restructuring plan, Delphi Corp. has sold its battery product line, with the exception of two U.S. operations, to Milwaukee-based Johnson Controls Inc., for $202.5 million.

The business sold includes Delphi's global starting, lighting and ignition lead-acid battery operations, including joint venture interests. The transaction also includes tools, inventory, equipment, intellectual property and brand names, as associated with the battery product line. In addition, approximately 2,700 employees will transition with the business to JCI. The business generates approximately $600 million annually in global consolidated revenues.

Prior to the sale, Delphi's global battery product line manufactured lead- acid batteries for original equipment manufacturers and sold original equipment for aftermarket distribution. Delphi manufactures batteries in two U.S. plants in Fitzgerald, Ga., and New Brunswick, N.J.; and internationally in Sarreguemines, France; Piracicaba, Brazil; Tlaxcala, Mexico; and joint ventures in Shanghai, China; Kumi, Korea; and Dammam, Saudi Arabia.

Effective June 30, Delphi's interest in its global battery plants has been transitioned to JCI, with the exception of the U.S. operations. The transaction is anticipated to be a two-step sale of Delphi's global battery business. In the first step, JCI assumed global supply contracts and shareholdings of Delphi's battery manufacturing operations in France, Brazil, Mexico and in Delphi's joint ventures in Korea, China and Saudi Arabia. Further, JCI assumed responsibility as a tier 1 supplier for OE customers of Delphi's U.S. operations. Delphi entered into a contract manufacturing supply arrangement, becoming a tier 2 supplier to JCI, and began supplying batteries from its two U.S. plants to JCI for a transition period. In the second step, subject to agreement between Delphi and its unions, it is anticipated that JCI would purchase Delphi's New Brunswick, N.J., operation. Pending a commercial agreement between Delphi and a customer, and final discussions with the UAW, the Fitzgerald, Ga., operation will remain with Delphi and change to a new product line at the conclusion of this transition period.

Approximately 3,470 employees, hourly and salaried, work in Delphi's worldwide and joint venture battery manufacturing business.

"The sale of this business is another step forward as we continue to refine our product portfolio and execute our business transformation," said Guy C. Hachey, president of Delphi's Energy & Chassis division. "We will continue aligning resources around our growth products that excite our customers and set us apart in the marketplace."

Delphi's decision to sell the battery business line follows an intensive product portfolio review, which indicated the product was outside of the primary focus of the company's growth and long-term strategic goals.

Delphi will remain as committed as ever to its growth strategy in all sectors of its business, including automotive, non-automotive and in the independent aftermarket. Delphi is continuing to focus on customer needs, providing each of these segments with the best products and service solutions.

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   About Delphi Corporation

Delphi is a world leader in mobile electronics and transportation components and systems technology. Multi-national Delphi conducts its business operations through various subsidiaries and has headquarters in Troy, Mich., USA, Paris, Tokyo and Sao Paulo, Brazil. Delphi's two business sectors -- Dynamics, Propulsion, Thermal & Interior Sector and Electrical, Electronics & Safety Sector -- provide comprehensive product solutions to complex customer needs. Delphi has approximately 184,000 employees and operates 167 wholly owned manufacturing sites, 42 joint ventures, 53 customer centers and sales offices and 33 technical centers in 40 countries. Delphi can be found on the Internet at http://www.delphi.com/ .