By DEREK R. SMITH, Kokomo Tribune business writer
Delphi Corp. investors won't be getting their quarterly dividend.
The board of directors for the nation's largest auto supplier announced the elimination of a 1.5 cent per share quarterly dividend for the company's common stock for the remainder of the year.
Delphi's board cited "challenging U.S. production volumes" by General Motors Corp., its former parent and largest customer, and the need to preserve liquidity as Delphi officials negotiate with the United Auto Workers and GM to cut Delphi's costs.
GM, the world's largest automaker, has cut its production due to a declining market share.
Delphi spun off of GM in 1999.
The Troy, Mich.-based supplier lost $409 million in the first quarter, compared to a $53 million profit the previous year. Delphi also faces a federal accounting investigation that began last fall.
Kokomo is the world divisional headquarters of Delphi Electronics & Safety, which has about 29,900 employees on four continents. About 5,500 of the division's employees work in Kokomo.
Robert Miller, Delphi's CEO and chairman of the board, visited Kokomo's Delphi Electronics & Safety Wednesday.
"Delphi is going through a time of tremendous financial stress," he said.
Miller said he is hopeful Delphi can survive without filing Chapter 11 bankruptcy. He has repeatedly mentioned Oct. 17 -- when the new federal bankruptcy law takes effect -- in recent weeks.
On Wednesday, Miller said the date is "a milestone, not a hard and fast deadline" for Delphi to reach an agreement with GM and the UAW.
Delphi's board said it will re-evaluate the company's dividend policy in the first quarter of 2006.
Miller, known in the automotive industry as a turnaround specialist, said Wednesday "if we can get through our financial stress, then my job here is finished." He hopes to leave Delphi behind within two years to spend time with his grandchildren and model trains.
©2005 The Kokomo Tribune.