Delphi Corporation Business Report FY2007

Business Highlights

Financial Overview

(in million
FY2007 FY2006 Rate of
Net Sales 22,283 22,737 (2.0%) GM sales :
8,301 million USD (37%)
-Decreased by 1,043 million USD

Other customer sales :
13,982 million USD (63%)
-Increased by 589 million USD
(1,945) (4,542) - -Operating loss decreased 2.6 billion USD during FY2007.
(3,065) (5,464) - -Net loss decreased 2.4 billion USD during FY2007.

(in million
FY2007 FY2006 Rate of
Electronics and Safety
Net Sales 5,035 5,093 (1.1%) -Lower volume of 161 million USD and contractual price reductions of 117 million USD.
-These decreases were partially offset by the favorable fluctuations in foreign currency exchange rates of 151 million USD.
63 188 (66.5%) -Contractual price reductions of 117 million USD and a reduction in volume of 64 million USD
Powertrain Systems
Net Sales 5,663 5,565 1.8% -The favorable impact of foreign currency exchange rates of 193 million USD.
-Offsetting these increases were decreased volume of 162 million USD, contractual price reductions of 101 million USD.
(276) (128) - -Reduction in volume of 177 million USD, contractual price reductions of 101 million USD
Electrical/Electronic Architecture
Net Sales 5,968 5,365 11.2% -Increases in volume of 526 million USD in Europe, Asia and South America.
-Partially offset by declines in volume in North America of 159 million USD.
-Also unfavorably impacted by contractual price reductions of 131 million USD.
(36) (110) - -Favorably impacted by operational performance improvements, primarily manufacturing and material efficiencies, of 284 million USD.
-Offset by contractual price reducitons of 131 million USD
Thermal Systems
Net Sales 2,412 2,607 (7.5%) -Decreased volume of 335 million USD
-Offsetting the decreases was a favorable impact in foreign currency exchange rates of 78 million USD
(29) (170) - -Favorable operational performance of 191 million USD
-Unfavorably impacted by a reduction in volume of 108 million USD and contractual price reductions of 55 million USD
Automotive Holdings Group
Net Sales 2,946 3,638 (19.0%) -Volume and the exit of certain plants and products of 737 million USD.
-Partially offset by favorable currency exchange rates of 63 million USD.
Operating Income (393) (488) - -Operational performance improvements, primarily in manufacturing, of 352 million USD.
-Unfavorably impacted by an increase in expense for employee termination benefits and other exit costs of 212 million USD
Corporate and Other
Net Sales 259 469 (44.8%) -
Operating Income (1,274) (3,834) - -


-Chery Automotive
The Company announced that it has won a contract from a Chinese automaker, Chery Automobile, to supply total occupant protection systems and integrated navigation systems with audio-video equipment. Beginning in 2009, it will supply its advanced occupant protection system composed of driver and front passenger airbags, curtain airbags, and side airbags on all vehicles that Chery is currently producing. Its airbag control unit interfaces with detecting systems such as passenger seat occupant detection systems and seat-track position sensors, which detect loading force on the front passenger seat to classify the seat as empty or not as well as the physical size of the occupant. This system optimizes the airbag inflation for minimizing the damage by detecting the type of an accident. Chosen as a main safety supplier for China's fast growing domestic auto company, the Company aims to further increase its presence in the global market. (From an article in the Nikkan Jidosha Shimbun on Jan.17, 2007)

The Company's patented climate control technology, Set & Forget, is featured on the 2007 Saturn Aura midsize sedan. The Set & Forget Automatic Climate Control (ACC) System is a significant new technology offering intended to help improve customer comfort by considering changing weather and environmental conditions and then automatically adjusting the cabin temperature accordingly. (From a press release on Feb. 28, 2007)

The Company will provide the hardware to enable Chrysler Group to be the first and only manufacturer to offer SIRIUS Backseat TV邃「 in its vehicle lineup in the 2008 model year. A digital audio and video signal is sent to the vehicle, this service provides passengers with three channels of family-oriented TV programming. In addition to the all-new 2009 Chrysler Town & Country and Dodge Grand Caravan minivans, this feature will also be available on the 2008 Chrysler 300, Dodge Charger, Dodge Magnum, Jeep Commander and Jeep Grand Cherokee. (From a press release on Apr. 2, 2007)


The Company will provide the complete E/E distribution systems, the satellite radio and DAB (Digital Audio Broadcast) receiver, integrated antenna, passive-occupant detection system, security sensor and electrical/electronic distribution systems for the recently introduced Mercedes-Benz C-Class, and the injection system for the Diesel Common Rail in the 220 CDI model. (From a press release on Apr. 5, 2007)

The Company will provide its advanced Electrical/Electronic Architecture for Ford of Europe's new Mondeo. Its E/E Architecture weighs up to 20 percent less than conventional E/E solutions, which contributes to better fuel economy and lower exhaust emissions.The new vehicle also features the Company's smart cruise control, wiring, actuators, body electronics, dampers, emission canisters and antenna. (From a press release on Jul. 2, 2007)

-Mahindra & Mahindra

The Company will supply Mahindra & Mahindra with driver information systems for its Ingenio model vehicles starting in 2008. This business award from Mahindra & Mahindra, one of India's top automakers, is the Company's first win. These systems are capable of alerting drivers to unclosed doors, low tire pressure, low fuel, and many other important items. (From a press release on Aug. 2, 2007)


The Company's new ultra-thin wall cable, touted for its halogen-free requirements, superior performance, durability, smaller size and recyclability, makes its worldwide debut on the 2007 Toyota Tundra, delivered to dealer showrooms in February 2007. This new cable marks the first application of GE plastic's Flexible Norylツョ resins, developed in collaboration with the Company, in the automotive industry. (From a press release on Apr. 3, 2007)


- Jan. 2007
The Company has retained W.Y. Campbell & Company to explore sale opportunities for the majority of its powertrain and suspension mounts business.

The Company has entered into an asset sale and purchase agreement with Harco Manufacturing Group, LLC for the sale of its brake hose business.

- Jun. 2007
The Company has announced that two of its subsidiaries have entered into an asset sale and purchase agreement with Robert Bosch LLC and its affiliate Frenados Mexicanos, S.A. de C.V., for the sale of their brake components business.

-Sep. 2007
The Company, through certain of its affiliates, has entered into an asset sale and purchase agreement with a subsidiary of TRW Automotive Holdings Corp. for the sale of a portion of its North American brake component machining and assembly assets.

-Oct. 2007
The Company has completed the sale of its catalyst business to Umicore for approximately 66 million USD, subject to post-closing adjustments.Although the company has sold its catalyst business, it will continue to provide full engine management systems (EMS).

The Company has entered into a master sale and purchase agreement with a wholly owned subsidiary of The Renco Group, Inc. for the sale of its global Interiors and Closures business.

The Company has retained W.Y. Campbell & Company to explore sale opportunities for the majority of its global suspension business.

-Nov. 2007
Ashimori Industry Co., Ltd. will dissolve its joint venture contract with the Company. It will sell all its shares in the two joint ventures producing automobile seatbelts in the U.S. and Mexico and will liquidate their holding company. The two companies plan to continue their parts business alliance in the area of automotive safety even after the dissolution. With the Company, Ashimori had signed the business alliance contract in August 1999 and the joint venture contract on automotive seatbelt manufacturing and sales in 2000. (From an article in the Nikkan Jidosha Shimbun on Nov. 8)

-Dec. 2007
The Company has entered into a master sale and purchase agreement with Steering Solutions Corporation, a wholly owned entity of Platinum Equity, LLC, for the sale of its global steering and halfshaft businesses.

New Companies

Delphi Technologies Inc. (DTI), the Company's subsidiary, in conjunction with Michigan State University and Automation Alley, have formed a new antenna company called Monarch Antenna, Inc. Monarch has been created to commercialize innovative Self-Structuring Antenna (SSA) technology, developed by the Company and Michigan State University. (From a press release on Apr. 23, 2007)

The Company and Beijing Automotive Industry Holding Company Ltd. (BAIC) jointly established the Beijing Delphi Automotive Safety Products Co., Ltd. The joint venture started production of seat belts. in Aug. 2007.


R&D Structure

-As of December 31, 2007, the Company employed approximately 18,500 engineers, scientists and technicians around the world, including 16,000 at the Company's technical centers and customer centers, with over one-third focused on electronic and high technology products, including software algorithm development.

The Company announced that it will begin the second phase construction of its China Technical Center (CTC) in Shanghai this month and complete the construction by the end of this year. It plans to extend the research building, which opened last year, and add a new two-story 12,600 square meter research building. The Company is currently expanding its business with General Motors Corporation, which is enjoying brisk sales in China, and local capital automakers. (From an article in the Nikkan Jidosha Shimbun on Apr. 23, 2007)

R&D Expenditure

(in billion USD) FY2007 FY2006 FY2005
Amount 2.0 2.0 2.1

New Product Development (FY2007)

-Gasoline Direct injection (GDi) System
The Company will unveil a new gasoline direct injection (GDi) system at the Frankfurt International Motor Show (IAA 2007) held from September 13 through 23. The new system, which is optimized for bio- and other types of fuels, helps automakers develop vehicles that meet some of the most stringent emission regulations like super-ultra-low emission vehicles (SULEVs) required by the state of California and Euro VI vehicles. At the IAA, the Company will also demonstrate an array of its most advanced technologies, including a new common-rail system that complies with the regulations like the Euro6 and US Tier2, new battery monitor, new-generation radar sensor for smart cruise controls and adaptive cruise controls. (From an article in the Nikkan Jidosha Shimbun on Sep. 7, 2007)

-Oil Condition Sensor
The Company announced that it has developed a sensor technology to achieve extension of diesel oil and filter change intervals. This is the Company's proprietary technology to detect the level of deterioration by measuring viscosity and permittivity. The existing detection system of oil life may show an earlier oil change timing prior to its actual deterioration, because the system assumes replacement timing based on a vehicle running cycle including a travel distance. With the new method, replacement can be postponed until oil or filter actually degrades, allowing a longer use while preventing damage on the engine. The Company plans to supply the sensor to major truck manufacturers from 2009. (From a press release on Jan. 24, 2007)

-Ammonia Sensor
The world's first automotive ammonia sensor for SCR (Selective Catalytic Reduction) systems has been developed by the Company. A vehicle's SCR system injects ammonia, in the form of liquid urea and the ammonia reacts with the gas, converting it into nitrogen and water. By directly measuring tailpipe ammonia, the sensor allows the injection of urea to be optimised and ammonia emissions reduced. This new sensor is expected to reach production during 2010. (From a press release on Feb. 22, 2007)

-Cargo Detector Sensor
The Company is showcasing its trailer cargo detector technology at the Mid-American Truck Show. Using infrared illuminators, the cargo detector sensor easily verifies the presence of cargo in the trailer. The sensor checks whether there is the presence of cargo in the trailer and sends an "empty or not empty" signal, using the Company's image processing algorithms, back office using the asset tracking system. The cargo detector sensor is compatible with nearly any 40 - 53 foot trailer. (From a press release on Mar. 20, 2007)

-Battery IVT Sensor
The Company's new Battery IVT Sensor precisely measures current (I), voltage (V) and temperature (T). When it is integrated into a vehicle as part of active battery management, it can improve fuel efficiency, extend battery life and help optimize alternator. It is designed for use in passenger and commercial vehicles beginning with model year 2010. (From a press release on Jun. 11, 2007)

-Smart Junction Box

The Company has developed a new smart junction box, a distributor for high-performance and lightweight wire harnesses, and will strengthen marketing activities of the product to automakers. It says the electricity distribution function and electronic control function are packaged in the junction box to simplify wirings for in-vehicle communication and power supply.(From an article in the Nikkan Jidosha Shimbun on Oct. 31, 2007)

Technological Alliance
The Company announced a joint development program with a fabless semiconductor company that designs TV receiver chipsets, DiBcom, for a demodulator chipset used in an in-vehicle receiver for the digital terrestrial broadcasting in Japan. It will maintain compatibility with the existing TV receiver platform used in other countries including the U.S.A. to reduce development cost. The program calls for the practical application as early as 2008. (From an article in the Nikkan Jidosha Shimbun on Jan. 20, 2007)

Investment Activities

Capital Expenditure

(in million USD) FY2007 FY2006 FY2005
By Product Sector
Electronics & Safety 161 180 282
Powertrain Systems 149 157 227
Electrical & Electronic Architecture 182 182 206
Thermal Systems 66 25 37
Automotive Holdings Group 3 53 126
Corporate and Other 19 25 147
Discontinued operations 66 99 1,025
Total capital expenditures 646 721 1,183
By Geographic Area
North America 255 253 572(*1)
Europe, Middle East & Africa 217 275 331
Asia-Pacific 85 72 100
South America 23 22 22
Discontinued operations 66 99 158
Total capital expenditures 646 721 1,183

Overseas Investments


The Company will construct two plants to manufacture air-conditioning parts in China. In addition to an alternator plant whose construction is scheduled to start at the end of 2007 in Kunshan, near Shanghai, the Company will also build a compressor factory in 2008 although the site has not been decided. A Korean joint venture will be in charge of operation of these plants, raising the production of both to 500,000 units a year for the mid term. Designating these plants as strategic bases for Korea and other Asian markets, the company will seek to expand supply to Japanese automakers. The joint venture to operate the plants will be Korea Delphi Automotive Systems Corporation (KDAC) located in Daegu, southern part of Korea, 50% funded by the Company and 50% by Korean companies including GM Daewoo Auto & Technology Company (GMDAT). These two plants will make the total number of its manufacturing sites in China to 14. (From an article in the Nikkan Jidosha Shimbun on Apr. 6, 2007)

The Company and Beijing Automotive Industry Holding Company Ltd. (BAIC) celebrated the opening of their joint venture which manufactures seat belts. Located in Changping District, Beijing, the Beijing Delphi Automotive Safety Products Co., Ltd., manufacturing facility has 1,800 square meters of floor space. The joint venture started production two months ago for customers in the China market and has secured future production contracts in the European markets. (From a press release on Oct. 26, 2007)

The Company announced a plan to open a new diesel engine management system (EMS) components plant in Romania in order to increase supply capacity of the Group, which is recently receiving an increasing number of orders for the units that are Euro V, the latest emission regulation in Europe, compatible. The new site will begin the first phase of manufacturing operations before year-end. and the company will make additional investment of several million dollars gradually to address new needs. The new plant located in Iasi in northeast Romania will create over 1,000 jobs and its accumulated investment is projected to exceed 100 million euros in the mid term. The Iasi plant will start producing high-pressure pumps and injectors for common rail systems later, in addition to the EMSs, and serve as a plant specialized in diesel engine components. (From an article in the Nikkan Jidosha Shimbun on Aug. 6, 2007)