Auto parts maker Delphi is hurting bad, reporting Q4 losses of $853 million and a blood-curdling $5.5 billion loss for 2006. The abysmal numbers only intensify the GM spinoff's downward slide: Delphi saw a $828 million loss in Q4 of 2005 and lost $2.4 billion for 2005 as a whole.
CFO Robert Dellinger said the new numbers would have been on a par with Delphi's 2005 losses if not for $3 billion in restructuring costs — most of that related to the company's attempt to shed 20,000 unionized hourly workers. Investors can expect more pain going forward: Dellinger warned that "our losses are likely to continue until we completely and successfully address our high U.S. cost structure and complete all aspects of our transformation plan." That's thinly veiled code for "if the unions don't back down, we'll be deep-fried in a hurry." Delphi is still trying to reach agreements with unionized workers on wages and benefits � in addition to ongoing negotiations with former parent GM � but the outcome is far from certain.
[Source: Delphi, BusinessWeek, Reuters]
