Financial Daily from THE HINDU group of publications
Tuesday, Oct 11, 2005
Financial Daily from THE HINDU group of publications Tuesday, Oct 11, 2005 |
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Corporate
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Outlook `Delphi's Indian operations will not be affected' Our Bureau
New Delhi , Oct 10 DELPHI Automotive Systems, the Indian subsidiary of automotive component manufacturing giant Delphi Corp, today said that filing of bankruptcy proceedings in the US by the parent company will not affect Indian operations. "The non-US subsidiaries are not a part of the filing in the US and from a regional standpoint we can assure that the Asia-Pacific region including India are insulated from the developments in the US," said Mr Prashant Shah, Vice-President (Sales and Marketing). On the contrary, the company is looking to strengthen its technology centre in Bangalore with an investment of $10 million, which would be primarily used to ramp up the engineering design division. "As of now, the technology centre is mainly working on software development but we are now looking towards more engineering work, including design development," said Mr K. Prabhakar, Vice-President (Operation). Delphi India clocked turnover of about $110 million in 2004 (of which exports accounted for $30 million) and this year the company is expecting to clock around $125 million. It is further strengthening its manufacturing in India. The company recently commenced manufacturing of engine mounts at its Noida unit, which would be exported to General Motors USA. It has also entered into an alliance with Varroc to manufacture two-wheeler exhaust systems that are to be ready by later this quarter. Mr Prabhakar also said that the Asia-Pacific region is cash positive and the company has access to $1 billion from a cash corpus for non-US operations. "This is besides the regular cash flow. So, we are not envisaging any issues for funding growth in India." He added that supplies by Indian component manufacturers to Delphi USA would not be affected as manufacturing is going on normally and orders by OEMs are being met. The auto component major filed for bankruptcy proceedings under Chapter 11 in the US on Saturday. In the US, Delphi will change its product portfolio and work towards manufacturing footprint reorganisation. According to international media reports, Delphi USA plans to emerge from bankruptcy in early to mid-2007 after cutting US manufacturing operations and modifying labour agreements to reduce wages and benefits. Market analysts said that the restructuring could benefit lower-cost manufacturing countries such as India along with China, as Delphi could relocate some of its product lines to these countries to cut costs.
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