Delphi Bankruptcy
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With General Motors as the main stakeholder, Delphi bankruptcy has become the ‘talk of the town’ due to the huge impact the declaration had on jobs and production. Though the company tried hard to come over the bankruptcy protection by attracting financers, all its plans for restructuring doomed due to the last minute withdrawals by investors. Finally, it succumbed to the pressure and sold its assets to lenders and its former parent in October 2009.[br]
However, posting a resilient image with the investors and ‘resurrectors’, Delphi changed its name to Delphi Holdings and gave a new life to General Motors which was itself reeling under the affect of economical turmoil and had invested over $12.5 billion to support the re-organization.
History: Delphi Bankruptcy
Delphi was started by GM in 1994 under the name Automotive Components Group (ACG). Below is the chronological list of events that took Delphi with an employee force of 50,000 to 14,000:
· 1995: ACG is rebranded and called Delphi Automotive Systems.
· 1997: Delco Electronics is transferred from Hughes to Delphi
· 1999: Delphi Automotive Systems converts into a fully independent public corporation.
· 2001: 11,500 jobs are cut all over the world
· 2002: Company is renamed again. Delphi Corporation becomes the new brand name to reflect its diversified businesses.
· 2004: Delphi is subpoenaed for irregular accounting and financial transactions. Securities & Exchange Commission (SEC) serves the notice in July.[br]
· 2005: Delphi agrees to the irregular accounting and financial embezzlement. As a result, the company is unlisted from the New York Stock Exchange. The stocks trade only on the Pink Sheets electronic exchange over the counter.
· 2005: 24 plants close down in US.
· 2006: Delphi announces the sale of 21 of its 29 plants. Remaining plants are Brookhaven, Clinton, Grand Rapids, Kokomo, Lockport, Rochester, Warren and Vandalia. These plants start operating with age reduction and workforce shedding.
As of Oct 2009, Delphi had sold most of its assets to its main lenders namely Silver Point Capital and Elliot Management Corporation. General Motors took its four plants in New York Indiana and Michigan.
