Delphi Corporation Business Report FY2007
Business Highlights
Financial Overview
(in
million USD) |
FY2007 | FY2006 | Rate
of change |
Remarks |
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 |
Operating Income |
(1,945) | (4,542) | - | -Operating loss decreased 2.6 billion USD during FY2007. |
Net Income |
(3,065) | (5,464) | - | -Net loss decreased 2.4 billion USD during FY2007. |
(in
million USD) |
FY2007 | FY2006 | Rate
of change |
Remarks |
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. |
Operating
Income |
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. |
Operating
Income |
(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. |
Operating
Income |
(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 |
Operating
Income |
(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) | - | - |
Contracts
-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)
-GM
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)
-Chrysler
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)
-Daimler
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)
-Ford
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)
-Toyota
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)
Divestitures
- 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
-USA
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)
-China
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
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
-China
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)
-Romania
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)