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Old 10-08-2005, 02:02 PM   #1
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Delphi--The maker of lots of XM receivers declares bankruptcy. Does this change anything for satellite radio?

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Old 10-08-2005, 02:10 PM   #2
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They have to go completely bankrupt first, alot of companies get out of it.
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Old 10-08-2005, 03:04 PM   #3
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exactly... companies declare bankruptcy so they wont go bankrupt
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Old 10-08-2005, 04:23 PM   #4
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Quote:
Originally Posted by soxnationonline
exactly... companies declare bankruptcy so they wont go bankrupt
Well they ARE bankrupt, (they can no longer pay their creditors, pay their employees and keep the business running) but they will not close down because they are simply asking for protection under the bankruptcy laws, but this is still a bankruptcy. They will work out some sort of reorganization plan that the court must approve to pay their creditors and keep the company running. They can eventually work themselves out of bankruptcy if their creditors and those doing business with them work with them.

I don't see this impacting XM in terms of them being in bed with Delphi.
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Old 10-08-2005, 05:14 PM   #5
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i don't think it will affect xm directly but indirectly will affect xm because this will affect gm.
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Old 10-08-2005, 06:05 PM   #6
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Quote:
because this will affect gm.
Why?
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Old 10-08-2005, 06:31 PM   #7
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Quote:
Originally Posted by Satradioman
Quote:
because this will affect gm.
Why?
http://home.peoplepc.com/psp/newssto...10081967437659

DETROIT - Delphi Corp., the United States' largest auto supplier, filed for bankruptcy Saturday, sending shock waves through a U.S. auto industry already weakened by high labor costs and falling market share.

Delphi's bankruptcy, which is expected to result in plant closures and layoffs, is one of the largest in U.S. history.

Delphi filed to reorganize its U.S. operations in federal bankruptcy court in New York, where a hearing was scheduled Saturday. Delphi's non-U.S. operations were not included in the filing.

Delphi Chairman and CEO Robert S. Miller said the company hopes to emerge from Chapter 11 in early to mid-2007.

"We will make every effort to make this as quick as possible," Miller told The Associated Press on Saturday.

Miller, a restructuring expert who was hired in July, had threatened to take the company into bankruptcy if he failed to reach a restructuring agreement with Delphi's former parent, General Motors Corp., and its largest union, the United Auto Workers. Miller set a deadline of Oct. 17, when U.S. bankruptcy laws are scheduled to change.

Miller said Delphi will continue negotiating with GM and the UAW to lower its labor costs. Miller said the three parties agreed to continue their discussions after a bankruptcy filing.

"We mutually concluded there was still too much of the complex work yet to be done," Miller said. "It was not going to be efficient to work right up to the midnight deadline to the change in the law."

UAW officials blasted Delphi's decision to file for bankruptcy one day after sweetening the severance packages of 21 top executives to help persuade them to stay at the company.

"Once again, we see the disgusting spectacle of the people at the top taking care of themselves at the same time they are demanding extraordinary sacrifices from their hourly workers, engineers, administrative and support staff, midlevel managers and others," union leaders said in a statement.

Miller said nothing will change immediately. Delphi will continue to pay its 50,000 U.S. employees and suppliers and will ship its products on schedule. Delphi has 31 plants in 13 states, including Michigan, Ohio, Alabama and California. The company has 185,000 employees worldwide.

"We are not going to adversely affect our customers," he said. "Our people will get their pay checks and will still have their health benefits. Retirees will continue to get their checks. Any changes to that will be dealt with in an orderly way."

Jim Gillette, supplier analyst for CSM Worldwide in Grand Rapids, said he expects a number of underperforming plants to be shuttered or sold and that the negotiations with GM and the UAW will be key to determining how many. He also said the bankruptcy could prompt other companies to file, too.

"This is not going to be an isolated incident," he said. "It's really going to be a rough few weeks and a rough few months for the industry."

GM said it planned to work with Delphi, the courts and the unions as the auto supplier restructures, and acknowledged the filing could cause supply problems in the future.

Delphi will finance its operations with $4.5 billion (?3.71 billion) in loans, including up to $2 billion (?1.65 billion) in debtor-in-possession financing from a group of lenders led by JPMorgan Chase Bank and Citigroup Global Markets Inc.

Based in the Detroit suburb of Troy, Delphi has struggled to make a profit since GM spun it off in 1999. It lost $4.8 billion (?3.95 billion) in 2004 and nearly $750 million (?617.59 million) in the first half of this year.

Delphi, No. 63 on the 2005 Fortune 500 list of the country's largest corporations, had listed $17.1 billion (?14.08 billion) in assets and $22.2 billion (?18.28 billion) in debt in Saturday's bankruptcy petition. The company had $4.3 billion (?3.54 billion) in unfunded pension liabilities at the end of 2004, according to a company filing with the U.S. Securities and Exchange Commission.

The largest corporate bankruptcy in the U.S. was WorldCom Inc., which had $103.9 billion (?85.56 billion) in pre-bankruptcy assets.

Like Tower Automotive Inc. and other auto suppliers who have recently declared bankruptcy, Delphi has struggled with the high cost of steel and other raw materials as well as U.S. production cuts.

But Delphi also blamed its spinoff agreement with GM for saddling it with high labor costs. Under the agreement, Delphi is required to pay GM wages of $27 (?22.23) an hour to most of its 24,000 UAW-represented workers. That's double the level of competing suppliers, according to Standard & Poor's Ratings Services. Delphi also had to pay full wages and benefits to 4,000 laid-off workers in jobs banks, which cost it $400 million (?329.38 million) each year.

Delphi has a total of 30,000 U.S. hourly employees and 12,000 hourly retirees. About 6,000 hourly employees are represented by other unions, including the International Union of Electronic Workers/Communications Workers of America.

Delphi and GM have been tightlipped about the negotiations. But a letter sent from UAW leaders to union members in Kokomo, Ind., earlier this week said Delphi asked the UAW to accept wage cuts of more than 50 percent, to $10-$12 (?8.23-?9.88) an hour, and eliminate the jobs bank. Delphi also called for a reduction in health care benefits and vacation time.

Delphi also has been plagued by an accounting scandal that the FBI and the SEC are now investigating. Six people have resigned because of the investigation, including Delphi's former Chief Financial Officer Alan Dawes
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Old 10-09-2005, 05:39 AM   #8
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Good article but I wonder why they singled out GM for having supply problems. Delphi supplies electronics to other car companies also...
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Old 10-09-2005, 11:56 AM   #9
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Quote:
Originally Posted by Satradioman
Good article but I wonder why they singled out GM for having supply problems. Delphi supplies electronics to other car companies also...
Well he's a another link

http://news.bbc.co.uk/2/hi/business/4323854.stm

A few quotes from article

Delphi has been hit by problems at GM, its main customer, triggered by falling sales of sports utility vehicles.

and

Delphi's survival is crucial to GM, since under the terms of its spin-off in 1999, the auto giant will have to meet some of the firm's pension costs if it fails to emerge from bankruptcy.

This is a biggest one

According to the United Auto Workers (UAW) union, Delphi wants to reduce hourly US wages from their current $27 to $10 while being able to close and merge factories.

Now that's a big cut in pay...If true..
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Old 10-11-2005, 05:41 PM   #10
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now GM is about to get shit faced. might be a good slow down for sirius to get some extra ground, no?
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Old 10-11-2005, 06:13 PM   #11
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OEM wise,maybe alittle..But XM still has 2 other OEM cars which are 2 good sellers,Honda and Hyundai ...
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Old 10-11-2005, 08:22 PM   #12
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This will be a big distraction for Delphi and XM I'm sure, but the radios will continue to ship. It does seem possible that it could create some supply problems if they get into some issues with payments to component suppliers.
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Old 10-13-2005, 03:03 AM   #13
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Delphi is XM's principal supplier of radios. It's certainly not a devastating blow, but it's not good news for XM, especially going into the holiday shopping season.

Engadget is already predicting that this may not be a good holiday season for XM.
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Old 10-13-2005, 07:25 AM   #14
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This could really be devastating for GM--a kick in the stomach while GM is already realing. Hopefully they rally for those who depend on jobs and wages.

UB
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Old 10-18-2005, 11:02 PM   #15
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"The bankruptcy of auto parts giant Delphi Corp. is complicating the turnaround effort of former parent General Motors, and some analysts say it could push the world's biggest automaker into insolvency....Delphi chairman Robert Miller told reporters during a press conference Wednesday that if his company is unable to successfully reorganize under bankruptcy protection, the fallout to GM could be fatal."

http://sg.news.yahoo.com/051016/1/3vo97.html
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