TROY, Mich., June 16 /PRNewswire-FirstCall/ -- Delphi Corp. (Pink Sheets: DPHIQ) today announced another important step in its restructuring activities. The company has reached agreement with the IUE-CWA and General Motors (GM) Corp. on a special hourly attrition plan, similar to a plan agreed to with the UAW which includes incentivized and early retirements along with pre-retirement opportunities and certain buy-outs for eligible employees. GM has agreed to provide financial support under the proposed plan. The plan enables a more rapid transformation to a reduced labor cost structure across Delphi's U.S. manufacturing operations. The plan, which is subject to bankruptcy court approval, provides financial incentives for certain types of retirements and permits the transition of up to 3,200 IUE-CWA represented Delphi employees to GM for retirement purposes. Delphi will seek expedited court approval and will continue to focus on reaching a comprehensive consensual agreement on all issues.
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"We continue to be focused on the transformation of Delphi and this attrition plan provides a stronger framework to position our successful emergence from Chapter 11," said Delphi President and Chief Operating Officer Rodney O'Neal. "This plan further enables an effective transformation of our U.S. manufacturing and support operations."
Approximately 8,000 hourly IUE-CWA-represented employees are eligible to participate in the program. Certain eligible U.S. hourly employees may be offered a lump sum payment of $35,000 to retire. Eligible employees under the program may elect buyout packages ranging from $40,000 to $140,000.
Under the proposed program, GM has agreed to assume the financial obligations related to the lump sum payments to be made to eligible Delphi U.S. hourly employees accepting normal or voluntary retirement incentives. Additionally, GM will fund certain post-retirement employee benefit obligations related to Delphi employees who transition to GM under the plan for purposes of retirement as well as half of employee buyout costs.
Delphi filed for Chapter 11 reorganization of its operations in the United States on Oct. 8, 2005 in the U.S. Bankruptcy Court of the Southern District of New York and under the jurisdiction of Judge Robert Drain. For more information about Delphi and its operating subsidiaries, visit Delphi's media room at http://www.delphi.com/media/.
This press release, as well as other statements made by Delphi may contain forward-looking statements within the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, that reflect, when made, the Company's current views with respect to current events and financial performance. Such forward-looking statements are and will be, as the case may be, subject to many risks, uncertainties and factors relating to the Company's operations and business environment which may cause the actual results of the Company to be materially different from any future results, express or implied, by such forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, the following: the ability of the Company to continue as a going concern; the ability of the Company to operate pursuant to the terms of the debtor-in-possession ("DIP") facility; the Company's ability to obtain court approval with respect to motions in the chapter 11 proceeding prosecuted by it from time to time; the ability of the Company to develop, prosecute, confirm and consummate one or more plans of reorganization with respect to the chapter 11 cases; risks associated with third parties seeking and obtaining court approval to terminate or shorten the exclusivity period for the Company to propose and confirm one or more plans of reorganization, for the appointment of a chapter 11 trustee or to convert the cases to chapter 7 cases; the ability of the Company to obtain and maintain normal terms with vendors and service providers; the Company's ability to maintain contracts that are critical to its operations; the potential adverse impact of the chapter 11 cases on the Company's liquidity or results of operations; the ability of the Company to fund and execute its business plan; the ability of the Company to attract, motivate and/or retain key executives and associates; and the ability of the Company to attract and retain customers. Other risk factors are listed from time to time in the Company's United States Securities and Exchange Commission reports, including, but not limited to the Annual Report on Form 10-K for the year ended December 31, 2004 and its most recent quarterly report on Form 10-Q for the quarter ended September 30, 2005 and current reports on Form 8-K. Delphi disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events and/or otherwise.
Similarly, these and other factors, including the terms of any reorganization plan ultimately confirmed, can affect the value of the Company's various pre-petition liabilities, common stock and/or other equity securities. Additionally, no assurance can be given as to what values, if any, will be ascribed in the bankruptcy proceedings to each of these constituencies. A plan of reorganization could result in holders of Delphi's common stock receiving no distribution on account of their interest and cancellation of their interests. As described in the Company's public statements in response to the request submitted to the United States Trustee for the appointment of a statutory equity committee, holders of Delphi's common stock and other equity interests (such as options) should assume that they will not receive value as part of a plan of reorganization. In addition, under certain conditions specified in the Bankruptcy Code, a plan of reorganization may be confirmed notwithstanding its rejection by an impaired class of creditors or equity holders and notwithstanding the fact that equity holders do not receive or retain property on account of their equity interests under the plan. In light of the foregoing and as stated in its October 8, 2005 press release announcing the filing of its chapter 11 reorganization cases, the Company considers the value of the common stock to be highly speculative and cautions equity holders that the stock may ultimately be determined to have no value. Accordingly, the Company urges that appropriate caution be exercised with respect to existing and future investments in Delphi's common stock or other equity interests or any claims relating to prepetition liabilities.
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