Delphi CEO says collapse would harm world auto industry - FT

LONDON (Reuters) - The collapse of auto car parts supplier Delphi Corp. (DPH.N: Quote, Profile, Research) would damage most of the world's auto makers, the company's chief executive officer, Steve Miller, said in an interview published on Tuesday.
Speaking to the Financial Times, Miller said that could be avoided if the company makes enough cuts to ensure its survival.

Michigan-based Delphi filed for Chapter 11 bankruptcy on Saturday, piling pressure on General Motors Corp. (GM.N: Quote, Profile, Research), its biggest customer and former owner.
"If we do this right, Delphi will remain one of the world's leading global automotive suppliers," Miller said. "If we do it badly, Delphi may be broken up into small pieces, and America will have lost some of its precious industrial treasures.

"The impact of a collapse could potentially injure most of the world's automakers, and perhaps fatally wound General Motors. I am absolutely determined not to let that happen."
GM is closely tied to the unit it spun off in 1999 through complicated supply and labour agreements.

Miller said no decision had been made on Delphi's pension plans.
"We have about a $5 billion (2.85 billion pounds) shortfall in our plan assets to our plan liabilities," he told the FT. "Some have suggested that Chapter 11 (bankruptcy) means termination of the plans. That is simply not true, at least at this point in time.
"At Delphi, we have made no decision to terminate our pension plans."
He said unions would have to accept cuts to wages and benefits at Delphi to repay the pension plan shortfall.

"This will put the unions in the difficult position of perhaps having to make trade-offs between maximising the pay and benefits for active workers versus maximising the chances for saving the pension plans," he said.

Miller said Delphi's case was a "flash point, a test case" for a wider global conflict between the interests of current workers and retired employees.

"I fear something like inter-generational warfare, as young people increasingly resent having their wages reduced and taxed away to support social programs for their grandparents' income and health care concerns," he said.