By SCOTT SMITH, Kokomo Tribune staff writer
scott.smith@kokomotribune.com
Delphi Corp.'s Electronics & Safety division will cut 600 salaried positions from its North American work force by year's end, company officials announced Monday.
The majority of those job losses will be at the division's Kokomo headquarters.
A conference call on the announcement coincided Monday morning with a "town hall meeting" teleconference Electronics & Safety president Jeff Owens conducted with salaried employees at all of the division's North American properties.
Delphi spokesman Milton Beach said the cost-cutting plan, which also includes undisclosed material and energy savings goals, was made necessary by market conditions.
"The auto industry is facing some tough times - unprecedented times in North America," Beach said Monday. "People are no longer buying trucks and SUVs ... they're mostly buying small vehicles which have less electronic equipment - the stuff we produce at Delphi."
While Beach and Delphi spokesman Jay Jiang said the job cuts would come only from the division's North American work force, neither would speculate on the possibility of those jobs moving overseas.
About 2,500 members of Electronics & Safety's 3,200 salaried, North American work force are based in Kokomo, Beach said.
"Kokomo is our engineering center, and for Kokomo, it will continue to [be] so, but at the same time, we will continue to see our capabilities grow outside of North America, in terms of engineering support to our local customers," Jiang said.
While North American auto sales are projected at 13.8 million vehicles this year, down from 15.5 million last year, Delphi sales outside the U.S., particularly in the Asia/Pacific region, are growing "very fast," the spokesmen said.
Jiang said there continues to be a need for engineers outside the U.S., who can discuss local applications for Delphi products with non-English speaking customers.
Electronics & Safety division executives have set a 25 percent overall cost reduction goal, Beach said. No estimate was available Monday on how much of the goal was to be achieved through job cuts, and how much was to be achieved through other means.
Beach had no additional announcements Monday on the status of Kokomo's hourly production work force, which has seen a steady decline over the past decade. He said there were no plans imminent to sell or cut production at the Kokomo integrated circuit manufacturing plant. He said the plant provides only a small portion of the integrated circuits used in Delphi electronics.
Jiang said the E & S division is still Delphi's core business, it is "the future of Delphi."
"We can bring this company back to a healthy path if we're able to reduce our costs and remain competitive," Jiang said.
Supervisors already know which salaried employees will be let go, Beach said, and notification should begin "as soon as possible." Supervisors have an Aug. 29 deadline to notify each employee slated for separation.
No details were released Monday on what sort of severance packages will be offered, but Beach said company policy spells out the specifics of what each employee is entitled to.
Packages range from three to 12 months of salary, based on the length of service of each employee and other factors. Delphi will also provide assistance in helping the employees find other work.
Beach said the job cuts would be made "through attrition if possible," but offered no other specifics on how the cuts had been determined.
In addition to the salaried work force in Kokomo, the E & S division also has salaried workers in Auburn Hills, Mich., Flint, Mich, Milwaukee, Wis., Vandalia, Ohio, and about 107 engineers scattered throughout southeastern Michigan.
Company officials did not release how many job cuts would be made at each of those North American Electronics & Safety division properties.
Delphi, which employs about 4,000 in Kokomo, has struggled to emerge from a 2005 bankruptcy filing. A financing package fell through in April, and Friday the federal government warned Delphi it must transfer $1.5 billion in unfunded pension obligations to General Motors by Sept. 30.
Last month, company officials announced they would vacate three buildings at Kokomo's Electronics & Safety campus.