Delphi has reached an agreement to sell off its brake and suspension business. A consortium consisting of Tempo Group, Capital Iron & Steel Co. and the Beijing government will own Beijing West Industries Co. Ltd, a new company that will buy the remaining chassis and brake operations of Delphi. Almost all of Delphi's brake business has been with GM, but many of those contracts have been re-sourced over the last several years while the company has been under chapter 11 bankruptcy. Recently, the most prominent part of the business has been the magnetic ride system which has been adopted by customers including General Motors and Ferrari. The new Chinese-owned company gets the tooling, intellectual property and some of the factories along with remaining supply contracts. Whether this change helps the business survive and thrive remains to be seen.
Press Releases
Delphi Signs Agreement to Sell Global Suspension and Brakes Business
Company To File Motion Requesting Court Hearings To Approve Bidding Procedures and Authorize Sale of Assets
Release Date: March 31, 2009
Troy, Mich. -- Delphi Corporation (PINKSHEEETS: DPHIQ) announced today that it has made further progress with its portfolio transformation and has entered into an asset sale and purchase agreement with BeijingWest Industries Co., Ltd. for the sale of Delphi's remaining global suspension and brakes business. As part of the company's transformation plan announced on March 31, 2006, Delphi identified its brakes and suspension business as non-core product lines that no longer fit into the Company's future strategic framework and could become more profitable and competitive as stand-alone businesses or as part of another organization with the working capital to invest in and support these businesses. Having previously concluded asset sales and business transfers with Bosch, Tenneco and TRW in North America, as well as asset sales and business transfers with SEVA in South America, this proposed sale represents further substantial progress towards the completion of Delphi's transformation plan announced three years ago.
As required under the U.S. Bankruptcy Code, Delphi expects to file a motion later today with the U.S. Bankruptcy Court for the Southern District of New York requesting a hearing on April 23, 2009, to approve bidding procedures, and a hearing on May 21, 2009, authorizing and approving the sale of assets.
The final sale of the business is subject to court approval and other closing conditions. Delphi anticipates the sale closing during the fourth quarter of 2009.
Under the sale and purchase agreement, BeijingWest Industries Co., Ltd. will acquire machinery and equipment, intellectual property and certain real property. Assignment and assumption of certain customer and supplier contracts will also transfer to BeijingWest Industries Co., Ltd. Delphi will carefully manage the transition of the business, and the sale will be completed in coordination with Delphi's customers, employees, unions and other stakeholders.
The business today is comprised of approximately 3,000 employees, primarily located in Poland, China, Mexico, France and the United States.
More information on this agreement and the court filing will be available at www.delphidocket.com.
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