Delphi First-Half Loss Triples on Buyout Costs

Delphi Corp., the nation’s largest auto parts supplier, said Tuesday that it lost $2.6 billion in the first half of 2006, largely because of the cost of employee-buyout and early-retirement packages that are key to the company’s bankruptcy reorganization.

The loss was more than three times the $741 million that Delphi lost in the first half of 2005.

The Troy, Mich.-based company, which filed for Chapter 11 bankruptcy protection in October, said revenue increased slightly to $14 billion from $13.9 billion a year earlier.

Delphi, a former arm of General Motors Corp., reported progress in diversifying its sales, with non-GM revenue increasing 9% to $7.7 billion from $7.1 billion in the first half of 2005.

The first-half loss included about $1.9 billion in charges related to buyouts and early retirements.

About 12,500 workers represented by the United Auto Workers signed up for early retirement. More UAW members are eligible for buyout packages, which were offered later, and they have until Sept. 15 to decide.

The 7,900 Delphi workers represented by the International Union of Electronic Workers-Communications Workers of America were offered similar deals and had until today to sign up. Employees who accept the offers have seven days to change their minds, so Delphi was holding off on disclosing a final tally.

The agreements on buyouts were a significant step in easing tensions between Delphi and its workers, who could strike if Delphi wins approval from a Bankruptcy Court judge to throw out the company’s labor contracts and impose wage and benefit cuts.

In a sign that the sides may be approaching an agreement, Delphi asked the judge to postpone a hearing on its request to throw out the contracts. The hearing is now set for Thursday.

GM is also part of the talks. Delphi is still GM’s main supplier, and a strike there would be damaging to the automaker.

Delphi reported its first- and second-quarter results simultaneously.