BY DAVID F. NELSON

Herald Bulletin Staff Reporter

Delphi Automotive Systems will close Plant 11, the company announced Monday, after it failed to reach an agreement to sell the generator plant to Anderson-based Delco Remy America.

The announcement, called a "wind-down" plan, puts at risk 630 Delphi workers and raised concerns throughout the city's business community.

"What happened to the transaction with Delco? Why didn't they work out an agreement?" asked John Hagen executive director of the Corporation of Economic Development in Anderson. "Why didn't Delphi and the union remain at the table? This is a big surprise.

"I would have liked to see them back at the table and get a deal done," Hagen said. "These jobs are very important to the community. I am very concerned about Delphi's presence in general."

Mayor J. Mark Lawler called the announcement discouraging.

"I asked a GM executive if he had ever heard this type of announcement as a 'wind-down plan'. He said he'd never heard such a phrase," Lawler said. "We need to know what the nature of a wind-down plan is so that we can work appropriately. Does this mean a potential loss of 50 or 400 jobs? It is very disturbing when you hear this type of announcement from one of the community's major employers."

The plan calls for Delphi to close Plant 11 and lay off generator engineers working in Plant 18. The company will continue to produce ignition systems in plants 18 and 20.

"There will be various options to employees including transfers, flow back to GM (based on General Motors' needs and employee seniority), opportunities in the Delphi jobs bank, or early retirement," said spokeswoman Kathryn Oldham at Delphi's Troy, Mich., headquarters.

The company plans to release a timeline for closing the plant within the next few weeks, after it decides how to complete or modify contracts with its customers.

United Auto Workers Local 662 president Cindy Miller said it would be business as usual until further notice.

"Our members are protected by a national agreement (between Delphi and UAW) to maintain job security until September of 2003," said Miller, who would not comment further.

Delphi attempted to sell Plant 11 to Delco Remy, but the companies couldn't come to an agreement.

"We would have preferred to complete the deal," Delco Remy spokesman John Pyzik said in a statement. "However, we will go on to the next good acquisition opportunity that fits our core business lines. We wish our long-time friends and associates at Delphi the best and will stand by them to help in any way we can in the future."

U.S. Rep. Mike Pence, R-2nd District, said he would contact Delphi, DRA, General Motors and UAW officials to try to broker a deal. "These jobs are extremely important to the city of Anderson, the second congressional district and the state of Indiana," he said.

Delphi made the announcement on its Web site early Monday. Four other generator plants affected include Flint, Mich.; Rochester, N.Y.; Chihuahua, Mexico; and Villeron, France.

"We are shifting to a wind-down approach to eliminate all capital spending, engineering expense and general administrative support for the generator product line, except the absolute minimum required to ensure that our customer's source supply is not placed in jeopardy," said Guy Hachey, president of Delphi Energy & Chassis Systems division, on the company Web site. "We must continue focusing our management attention and resources on product lines that meet our objectives of growth, profitability, and alignment with the company's strategic vision."

©2000 The Herald Bulletin.