Once again, it wasn’t a great week to be in the automotive supplied-components business. Visteon salaried employees
learned that they might get stuck with
100% of their post-retirement health-care premiums, which breaks the promise that was made when Visteon was
spun-off from parent company Ford five years ago. About 1,300 workers have sufficient seniority not to be affected by
the June 1, 2007 cutoff date for this change, which leaves approximately 4,300 left to pay 100% of
their health-insurance premiums, and an unspecified number that
will need to foot part of the bill. Not to be left out of the fun was Delphi, which restated its 2004 loss and saw it
jump from $35 million to $4.8 billion, a
difference of more than a hundredfold. That’s a heck of an accounting error, and gives Delphi the distinction of having
the largest yearly loss in the auto industry since Ford in 2001. With a market capitalization of about $2.5 billion,
this is incredibly bad news. It wouldn’t be surprising to see a bailout of Delphi by GM in the new future.
Another tough week in the auto parts world
Once again, it wasn’t a great week to be in the automotive supplied-components business. Visteon salaried employees learned that they might getstuck with 100% of their post-retirement health-care premiums, which breaks the promise that was made when Visteon was spun-off from parent company Ford five years ago. About 1,300 workers have sufficient seniority not to be affected by the June 1, 2007 cutoff date for this change, which leaves approximately 4,300 left to pay 100% of their health-insurance premiums, and an unspecified number that will need to foot part of the bill. Not to be left out of the fun was Delphi, which restated its 2004 loss and saw it jump from $35 million to $4.8 billion, a difference of more than a hundredfold. That’s a heck of an accounting error, and gives Delphi the distinction of having the largest yearly loss in the auto industry since Ford in 2001. With a market capitalization of about $2.5 billion, this is incredibly bad news. It wouldn’t be surprising to see a bailout of Delphi by GM in the new future.