================================================================= DELPHI BANKRUPTCY NEWS Issue Number 1 ----------------------------------------------------------------- Copyright 2005 (ISSN XXXX-XXXX) October 10, 2005 ----------------------------------------------------------------- Bankruptcy Creditors' Service, Inc. 215-945-7000 FAX 215-945-7001 ----------------------------------------------------------------- DELPHI BANKRUPTCY NEWS is published by Bankruptcy Creditors' Service, Inc., 572 Fernwood Lane, Fairless Hills, Pennsylvania 19030, on an ad hoc basis (generally every 10 to 20 days) as significant activity occurs in the Debtor's cases. New issues are prepared by Kenneth Rae V. Bramida, Christopher G. Patalinghug, Frauline S. Abangan and Peter A. Chapman, Editors. Subscription rate is US$45 per issue. Any re-mailing of DELPHI BANKRUPTCY NEWS is prohibited. ================================================================= IN THIS ISSUE ------------- [00000] HOW TO SUBSCRIBE TO DELPHI BANKRUPTCY NEWS [00001] BACKGROUND & DESCRIPTION OF DELPHI CORPORATION [00002] DELPHI CORPORATION'S BALANCE SHEET AT JUNE 30, 2005 [00003] COMPANY'S PRESS RELEASE ANNOUNCING CHAPTER 11 FILING [00004] DELPHI CORPORATION & AFFILIATES CHAPTER 11 DATABASE [00005] LIST OF DEBTORS' 50-LARGEST UNSECURED CREDITORS [00006] DEBTORS' MOTION FOR JOINT ADMINISTRATION OF CASES [00007] DEBTORS' MOTION FOR AUTHORITY TO USE CASH COLLATERAL [00008] DEBTORS' MOTION TO PAY ESSENTIAL CREDITORS' CLAIMS [00009] U.S. TRUSTEE SETS OCTOBER 17 MEETING TO FORM COMMITTEES [00010] DELPHI NAMES R. DELLINGER AS NEW CHIEF FINANCIAL OFFICER [00011] DELPHI RECEIVES COURT APPROVAL OF BRIDGE ORDERS [00012] GENERAL MOTORS COMMENTS ON DELPHI CHAPTER 11 FILING [00013] UAW STATEMENT ON DELPHI FILING FOR BANKRUPTCY KEY DATE CALENDAR ----------------- 10/08/05 Delphi's Voluntary Petition Date 10/17/05 Organizational Meeting to form Creditors' Committees 10/23/05 Deadline for Delphi's Schedules of Assets & Liabilities 10/23/05 Deadline for Delphi's Statements of Financial Affairs 10/23/05 Deadline for Delphi's Lists of Leases and Contracts 10/28/05 Deadline for Delphi to provide Utility Deposits 12/07/05 Delphi's Deadline to make Lease Disposition Decisions 12/16/05 Delphi's Target Date to File Sec. 1113 & 1114 Motions 01/06/06 Delphi's Deadline to remove actions under FRBP 9027 02/05/06 Expiration of Delphi's Exclusive Plan Proposal Period 04/06/06 Expiration of Delphi's Exclusive Solicitation Period 10/08/07 Deadline for Delphi to Commence Avoidance Actions 10/08/07 Expiration of $2.0 Billion DIP Financing Facility First Meeting of Creditors under 11 USC Sec. 341 Bar Date for filing Proofs of Claim against Delphi ----------------------------------------------------------------- [00000] HOW TO SUBSCRIBE TO DELPHI BANKRUPTCY NEWS ----------------------------------------------------------------- DELPHI BANKRUPTCY NEWS is distributed to paying subscribers by electronic mail. 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Please enter my personal subscription to DELPHI BANKRUPTCY NEWS at US$45 per issue until I tell you to cancel my subscription. Name: ---------------------------------------------- Firm: ---------------------------------------------- Address: ---------------------------------------------- ---------------------------------------------- Phone: ---------------------------------------------- Fax: ---------------------------------------------- E-Mail: ---------------------------------------------- (Distribution to multiple professionals at the same firm is provided at no additional cost.) DELPHI BANKRUPTCY NEWS is distributed to paying subscribers by electronic mail. New issues are published on an ad hoc basis as significant activity occurs (generally every 10 to 20 days) in the Debtor's chapter 11 proceedings. The subscription rate is US$45 per issue. Newsletters are delivered via e-mail; invoices, transmitted following publication of each newsletter issue, arrive by fax. Re-mailing of DELPHI BANKRUPTCY NEWS is prohibited. Distribution to multiple individuals at the same firm is provided at no additional charge; folks outside of your firm should set-up and pay for their own subscriptions. Subscriptions may be canceled at any time without further obligation. ----------------------------------------------------------------- [00001] BACKGROUND & DESCRIPTION OF DELPHI CORPORATION ----------------------------------------------------------------- Delphi Corporation 5725 Delphi Dr. Troy, Michigan 48098-2815 Telephone (248) 813-2000 Fax (248) 813-2670 http://www.delphi.com/ Delphi Corporation is the single largest global supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The Company's technologies and products are present in more than 75 million vehicles on the road worldwide. The Company supplies products to nearly every major global automotive original equipment manufacturer, with 2004 sales to its former parent, General Motors Corporation, equaling approximately $15.4 billion and sales to each of Ford Motor Company, DaimlerChrysler Corporation, Renault/Nissan Motor Company, Ltd., and Volkswagen Group exceeding $850 million. Delphi is also making increasingly significant contributions in communications (including telematics), computers, consumer electronics, energy, and the medical devices industry. A colorful 10-page overview of Delphi's U.S. and global operations is available for free at: http://bankrupt.com/misc/delphioverview.pdf Delphi employs approximately 50,600 people in the U.S. Those employees work in 44 manufacturing sites and 13 technical centers across the country, and in Delphi's worldwide headquarters and customer center located in Troy, Michigan. Approximately 34,750 of these individuals are hourly employees, 96% of whom are represented by approximately 49 different international and local unions. Outside the United States, the Company's foreign entities employ more than 134,000 people, supporting 120 manufacturing sites and 20 technical centers across nearly 40 countries worldwide. The Debtors' domestic corporate structure consists of: (a) 43 directly and indirectly wholly owned subsidiaries, 38 of which have sought chapter 11 protection, and (b) eight directly and indirectly partially-owned joint ventures, with ownership interests ranging from 19% to 80%, none of which has sought chapter 11 protection. Delphi Foundation, Inc., a Delaware non-profit, non-stock corporation, was created by the Company exclusively for receiving and administering funds for charitable, educational, and scientific purposes. It is has not sought Chapter 11 protection. The Spin-Off Delphi was incorporated in Delaware in 1998 as a wholly owned subsidiary of GM. Before January 1, 1999, GM conducted the Company's business through various divisions and subsidiaries. Effective January 1, 1999, the assets and liabilities of these divisions and subsidiaries were transferred to Delphi and its subsidiaries and affiliates in accordance with the terms of a Master Separation Agreement between Delphi and GM. As contemplated by GM and Delphi and as part of the Spin-Off, in February 1999, Delphi commenced a public offering of 100 million shares of Delphi's common stock and in May of that year, GM distributed the remaining Delphi common stock it held to holders of record of certain of GM's common stock. After the Spin-Off, Delphi accelerated its evolution from a North American-based, captive automotive supplier to a global supplier of components, integrated systems, and modules for a wide range of customers and applications. For the calendar year 2004, the Company generated $28.6 billion total net sales. Delphi says its success to date in diversifying its customer base is due to numerous factors, including technology, quality, delivery, service, and price. In the first two years following the Spin-Off, the Company generated more than $2 billion in net income. Every year thereafter, however, with the exception of 2002, the Company has suffered losses. In calendar year 2004, the Company reported a $482 million net operating loss on $28.6 billion in net sales. Reflective of a downturn in the marketplace, Delphi's financial condition has deteriorated further in the first six months of 2005. The Company experienced net operating losses of $608 million for the first six months of calendar year 2005 on six- month net sales of $13.9 billion, which is approximately $1 billion less in sales than during the same time period in calendar year 2004. DELPHI'S ROAD INTO AND OUT OF CHAPTER 11 Three Problems Three significant issues contributed to the deterioration of Delphi's financial performance, Chairman and CEO Robert S. Miller, Jr., explains: (A) U.S. Legacy Liabilities And Operational Restrictions. To borrow a phrase from recent airline restructurings, Mr. Miller says, Delphi is essentially the last remaining "hub and spoke legacy operator" in the automobile industry. The majority of the Debtors' collective bargaining agreements provide for wages and benefits which are well above market, costly pension plans and retiree health care and other benefits, and burdensome operating restrictions, constraining the Debtors' ability to compete effectively with their U.S. peers. In connection with the Spin-Off from General Motors, the Company was required to assume the terms and conditions of the collective bargaining agreements negotiated by its unions and GM. Delphi is the only U.S. auto supplier with an OEM assembly pattern labor agreement, resulting in unsustainable, inflexible and uncompetitive costs and liabilities. Consequently, the Debtors compensate their hourly workers an average of approximately $64 per hour, including benefits and legacy liabilities, which is nearly three times more than the hourly labor rates of its U.S. peer companies. Delphi's domestic hourly pension and other post- employment benefits -- OPEB -- including without limitation retiree health care and life insurance, exposed the Debtors to a staggering $10.4 billion in unfunded liabilities at the end of calendar year 2004, of which approximately $2.6 billion was on account of the Debtors' unfunded hourly pension obligations and $7.8 billion was on account of the Debtors' OPEB obligations to their hourly workers. During the first six months of 2005, the Debtors paid out $485 million for hourly pension obligations and $70 million for OPEB obligations. The Debtors project that cash outflows for hourly pension contributions and OPEB payments through 2007 will be approximately $1.7 billion and will increase geometrically thereafter if not addressed now as a result of the projected retirement of the Company's U.S. workforce in the years to come. In addition, due to declining business conditions, an increasing proportion of the Company's U.S. hourly workforce is, and is expected to continue to be, in a paid but nonproductive status, i.e., a fixed cost which is independent of volume and revenue. Under the terms of Delphi's collective bargaining agreements with its U.S. Unions, the Company is generally not permitted to permanently lay off idled workers, and in recent months, the number of idled hourly workers that receive nearly full pay and benefits has been as high as 4,000, although performing no work. Coupled with restrictions on the Debtors' ability to exit non-strategic, non-profitable operations, the magnitude of the cost of carrying idled, non-productive workers in the event of plant closings or winddowns effectively prevents the Debtors from addressing poor product portfolio businesses and non-profitable manufacturing operations. Historically, under the terms of the Spin-Off from GM, this problem was somewhat mitigated because Delphi's UAW employees were permitted to return to GM's employ (known as "flowback") under certain conditions. As a result of GM's lower production volumes, however, the opportunities for Delphi's employees to flowback to GM have been limited and may be further limited in the future. Consequently, although the U.S. hourly workforce was reduced by 15% over the 15-month period ended December 31, 2004, as of June 30, 2005, approximately 12% of the Company's U.S. hourly workforce was in a non-productive status. In 2004, this cost the Company more than $170 million, including wages and benefits. This situation is placing, and will increasingly place, financial burdens on Delphi of a scope and magnitude that threatens the Debtors' long-term viability and is no longer tolerable. (B) Challenging U.S. Vehicle Production Environment For Domestic OEMs. In light of the current economic climate in the U.S. automotive industry, the Debtors are facing considerable challenges due to revenue decreases and related pricing pressures stemming from a substantial slowdown in GM's North American vehicle production. Although the Debtors have shown steady growth of their non-GM business -- for the first six months of 2005, non-GM sales exceeded sales to GM for the first time -- these gains have been outpaced by the decrease of their GM sales. Indeed, GM still comprises approximately 49% of the Company's sales and GM sales for the first six months of 2005 were down by approximately $1.6 billion, an 18.9% year-over-year decline, thereby adversely affecting the Company's financial performance. (C) Increasing Commodity Prices. During the first six months of 2005, the Debtors faced substantial commodity cost increases, most notably for steel and petroleum-based resin products. The Debtors continue to work proactively with suppliers and customers to manage these cost pressures, including seeking alternative product designs and material specifications, combining the Company's purchase requirements with customers and suppliers, and changing suppliers, but despite these efforts, raw material supply has continued to be constrained and commodity cost pressures have continued to intensify as the Company's supply contracts expire during 2005. To the extent that the Debtors experience cost increases, they will seek to pass these cost increases on to customers, but if the Debtors are not successful, their income in future periods will be further adversely affected. To date, due to previously established contractual terms, the Company's success in passing commodity cost increases on to customers has been limited. The Chapter 11 Decision In light of these three problems, the Company determined that it would be imprudent and irresponsible to defer addressing and resolving its U.S. legacy liabilities, product portfolio, operational issues and forward looking revenue requirements. As a result, over the last six months, the Debtors have been engaging their Unions, as well as GM, in discussions seeking consensual modifications that would permit Delphi to align its U.S. operations to its strategic portfolio and be competitive with its U.S. peers, and to obtain financial support from GM to implement the Company's restructuring plan. Despite significant efforts to reach a resolution, the Company determined that these discussions were not leading to the implementation of a plan sufficient to address the Debtors' issues on a timely basis. In order to preserve value, the Company determined to commence these chapter 11 cases for its U.S. businesses to complete the Debtors' transformation plan. While not related to the filing of these chapter 11 cases, Mr. Miller notes, Delphi completed a financial restatement in June 2005, the effects of which reduced retained earnings as of December 31, 2001, by $265 million, reduced 2002 net income by $24 million, and improved 2003 net loss by $46 million. The nature of the restatement adjustments has been described on Form 8-K filings with the Securities and Exchange Commission. In conjunction with the restatement, the audit committee of the company's Board of Directors concluded its internal investigation of certain accounting transactions over the previous five years. The Company is continuing to cooperate with the government's investigation of these matters. The audit committee identified four material weaknesses in connection with its investigation involving lack of knowledge of generally accepted accounting procedures and appropriate staffing; certain ineffective or inadequate accounting policies; certain ineffective or inadequate controls over the administration and related accounting treatment for contracts; and an ineffective "tone" within the organization related to the discouragement, prevention, or detection of "management override" as well as inadequate emphasis on analysis of accounts and financial transactions. While these material weaknesses were not fully remediated as of December 31, 2004, the weaknesses did not contribute to the filing of these chapter 11 cases. Delphi has made and will continue to make improvements to its policies and procedures as well as to the staffing of positions which play a significant role in internal controls to address these matters as more fully described in the Company's SEC filings. Subsequent to the restatement, Delphi announced certain changes to strengthen its management team, including the appointment of a new Chairman and Chief Executive Officer, new Executive Vice President and Chief Financial Officer, and new Vice President and General Counsel. Robert S. "Steve" Miller, Jr. joined Delphi as Chairman and Chief Executive Officer on July 1, and Robert J. Dellinger and David M. Sherbin joined Delphi in October 2005 as Executive Vice President and Chief Financial Officer and new Vice President and General Counsel, respectively. Various private lawsuits commenced against the Debtors arising from and related to the restatement are now stayed as against the Debtors under the provisions of the U.S. Bankruptcy Code. Restructuring Goals Through the reorganization process, the Debtors intend to achieve competitiveness for Delphi's core U.S. operations by modifying or eliminating non-competitive legacy liabilities and burdensome restrictions under current labor agreements, and realigning Delphi's global product portfolio and manufacturing footprint to preserve the Company's core businesses. "This will require negotiation with key stakeholders over their respective contributions to the restructuring plan or, absent consensual participation, the utilization of the chapter 11 process to achieve the necessary cost savings and operational effectiveness envisioned in the Company's transformation plan," Mr. Miller says. "The Debtors believe that a substantial segment of Delphi's U.S. business operations must be divested, consolidated, or wound-down through the chapter 11 process." While under chapter 11 protection, Mr. Miller says that "Delphi will marshal all of its resources to continue to deliver value and high-quality products to its customers globally." Delphi is projecting positive financial results next year. In fact, Delphi is promising JPMorgan Chase Bank, N.A., and Citicorp USA, Inc., the lenders backing the company's new $2 billion debtor-in- possession financing facility, that Global EBITDAR -- earnings before interest, taxes, depreciation, amortization, extraordinary and non-recurring items, FAS 106 post-employment benefit costs, cash restructuring costs (subject to limits), and chapter 11 expenses -- will be no less than: Minimum Global For the Period EBITDAR Target -------------- -------------- 01/01/2006 through 01/31/2006 ($125,000,000) 02/01/2006 through 02/28/2006 ($100,000,000) 03/01/2006 through 03/31/2006 ($75,000,000) 04/01/2006 through 04/30/2006 ($50,000,000) 05/01/2006 through 05/31/2006 ($25,000,000) 06/01/2006 through 06/30/2006 ($25,000,000) 07/01/2006 through 07/31/2006 ($50,000,000) 08/01/2006 through 08/31/2006 ($25,000,000) 09/01/2006 through 09/30/2006 $50,000,000 10/01/2006 through 10/31/2006 $100,000,000 11/01/2006 through 11/30/2006 $150,000,000 12/01/2006 through 12/31/2006 $165,000,000 01/01/2007 through 01/31/2007 $200,000,000 02/01/2007 through 02/28/2007 $250,000,000 03/01/2007 through 03/31/2007 $300,000,000 04/01/2007 through 04/30/2007 $350,000,000 05/01/2007 through 05/31/2007 $400,000,000 06/01/2007 through 06/30/2007 $500,000,000 07/01/2007 through 07/31/2007 $550,000,000 08/01/2007 through 08/31/2007 $600,000,000 09/01/2007 through 09/30/2007 $650,000,000 10/01/2007 through 10/31/2007 $700,000,000 The limits on Delphi's Cash Restructuring Costs, for purposes of computing Global EBITDAR, are: Cash Restructuring For the Four Quarters Ending Cost Cap ---------------------------- ------------- December 31, 2005 $175,000,000 March 31, 2006 $175,000,000 [June 30, 2006] [$___________] September 30, 2006 $175,000,000 December 31, 2006 $175,000,000 March 31, 2007 $100,000,000 June 30, 2007 $100,000,000 September 30, 2007 $100,000,000 December 31, 2007 $100,000,000 Delphi intends to "preserve and continue the strategic growth of its non-U.S. operations and maintain its prominence as the world's premier auto supplier," Mr. Miller says. "Upon the conclusion of this process, the Debtors expect to emerge from chapter 11 as a stronger, more financially sound business with viable U.S. operations that are well-positioned to advance global enterprise objectives." ----------------------------------------------------------------- [00002] DELPHI CORPORATION'S BALANCE SHEET AT JUNE 30, 2005 ----------------------------------------------------------------- DELPHI CORPORATION CONSOLIDATED BALANCE SHEET (Unaudited) At June 30, 2005 ASSETS Current assets: Cash and cash equivalents $988,000,000 Accounts receivable, net: General Motors and affiliates 2,266,000,000 Other customers 2,461,000,000 Inventories, net: Productive material, work-in-process and supplies 1,326,000,000 Finished goods 543,000,000 Deferred income taxes 42,000,000 Prepaid expenses and other 325,000,000 --------------- Total current assets 7,951,000,000 --------------- Long-term assets: Property, net 5,721,000,000 Deferred income taxes 132,000,000 Goodwill 753,000,000 Other intangible assets 59,000,000 Pension intangible assets 1,044,000,000 Other 851,000,000 --------------- Total assets $16,511,000,000 =============== LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities: Notes payable and current portion of long-term debt $971,000,000 Accounts payable 3,568,000,000 Accrued liabilities 3,156,000,000 --------------- Total current liabilities 7,695,000,000 --------------- Long-term liabilities: Long-term debt 2,542,000,000 Junior subordinated notes due to Delphi Trust I and II 412,000,000 Pension benefits 2,740,000,000 Postretirement benefits other than pensions 6,598,000,000 Other 916,000,000 --------------- Total liabilities 20,903,000,000 --------------- Commitments and contingencies Minority interest 165,000,000 Stockholders' deficit: Common stock, $0.01 par value, 1,350 million shares authorized, 565 million shares issued in 2005 and 2004 6,000,000 Additional paid-in capital 2,670,000,000 Accumulated deficit (4,679,000,000) Minimum pension liability (2,460,000,000) Accumulated other comprehensive income (loss), excluding minimum pension liability (36,000,000) Treasury stock, at cost (3.6 million shares in 2005) (58,000,000) --------------- Total stockholders' deficit (4,557,000,000) --------------- Total liabilities and stockholders' deficit $16,511,000,000 =============== ----------------------------------------------------------------- [00003] COMPANY'S PRESS RELEASE ANNOUNCING CHAPTER 11 FILING ----------------------------------------------------------------- Delphi Corporation Files Voluntary Chapter 11 Business Reorganization Cases to Execute Transformation Plan and Address Legacy Issues and High-Cost Structure in the U.S. Non-U.S. Subsidiaries Are Not Included in U.S. Filing and Are Not Subject to Court Supervision or Chapter 11 Process Existing Global Management Team to Continue to Operate U.S. Businesses as Debtors-in-Possession and Non-U.S. Subsidiaries in the Ordinary Course of Business Global Operations and Shipments to Customers Expected to Continue Without Interruption Aggregate USD$4.5 Billion Financing Includes Commitment for USD $2 Billion in Debtor-in-Possession Financing and Adequate Protection Package for USD $2.5 Billion Prepetition Facilities DIP Financing and Cash on Hand of USD $1.6 Billion Available to Support Delphi's Worldwide Operations TROY, Michigan -- October 8, 2005 -- Delphi Corporation (NYSE:DPH) today announced that in order to preserve the value of the company and complete its transformation plan designed to resolve Delphi's existing legacy issues and the resulting high cost of U.S. operations, Delphi and 38 of its domestic U.S. subsidiaries filed voluntary petitions for business reorganization under chapter 11 of the U.S. Bankruptcy Code on Saturday in New York City. Delphi's non-U.S. subsidiaries were not included in the filing, will continue their business operations without supervision from the U.S. courts and will not be subject to the chapter 11 requirements of the U.S. Bankruptcy Code. Delphi's global management team will continue to manage both the U.S. and global businesses. Delphi expects to complete its U.S.-based restructuring and emerge from chapter 11 business reorganization in early to mid-2007. "Our global operations, both U.S. and non-U.S., will continue without interruption," said Robert S. "Steve" Miller, Delphi's chairman and CEO. "Our customers all over the world can be assured that we will continue to meet their scheduling, delivery and production needs in a timely manner. Throughout this reorganization of our U.S. businesses and beyond, we will be intensely focused on continuing to provide all of our customers with leading-edge technology, product development, superior engineering, outstanding quality products and services, and world-class customer support." Delphi plans to finance its global operations going forward with USD $4.5 billion in debt facilities plus additional committed and uncommitted financing lines and/or securitization facilities in Asia, Europe and the Americas. The financing includes USD $2.5 billion borrowed from prepetition revolver and term loan facilities and a commitment for up to USD $2 billion in senior secured debtor-in-possession (DIP) financing from a group of lenders led by JPMorgan Chase Bank and Citigroup Global Markets, Inc. The company plans to obtain approval of an adequate protection package for the benefit of its prepetition lenders as part of the Company's overall financing activities. The proceeds of the DIP financing together with cash generated from daily operations and cash on hand will be used to fund post-petition operating expenses, including its supplier obligations and employee wages, salaries and benefits. The overall liquidity available to Delphi (including more than USD $1 billion on hand outside the U.S., which Delphi does not plan to repatriate to fund U.S. operations) will support its global operations outside the U.S. and help ensure the continued adequacy of working capital throughout its global business units. "We took this action because we are determined to achieve competitiveness for Delphi's core U.S. operations, and the key to accomplishing that goal is reducing these costs as soon as possible," said Miller. "We simply cannot afford to continue to be encumbered by high legacy issues and burdensome restrictions under current labor agreements that impair our ability to compete. We must also realign our global product portfolio and manufacturing footprint to preserve our core businesses. This will require a substantial segment of our U.S. manufacturing operations to be divested, consolidated or wound-down through the chapter 11 process. We believe the chapter 11 process will provide the flexibility to address our legacy issues and allow us to take advantage of the fundamental strength of our businesses." Miller said that Delphi has been engaged in constructive discussions with representatives of its major unions, but was unable to complete the necessary modifications to its collective bargaining agreements without assistance from General Motors Corporation or intervention of the U.S. courts. "Having been unable to resolve our U.S. legacy issues out of court," Miller said, "we determined it was in Delphi's best interest to address the U.S. cost-structure issues through the chapter 11 process now while our liquidity position is strong. We will be making a further proposal this month to each of our unions to transform our labor agreements to a competitive labor cost structure and to address non-profitable and non-strategic U.S. operations. In addition, we expect to address pension plans and health and retiree benefits to align them with competitive benchmarks in the industry and our transformation plan." Delphi noted that its non-U.S. subsidiaries are generally competitive, cash flow positive and experiencing high growth opportunities. "One of our primary goals is to preserve and continue the strategic growth in non-U.S. operations while we address our U.S. cost structure issues through the chapter 11 process," said Miller. Delphi filed more than 40 "first-day" motions along with its voluntary petitions covering Delphi's employees and business operations, post-petition DIP financing, continuing supplier relations, customer practices, certain executory contracts, taxes and related matters, utilities, retention of professionals and case administration matters. The company said it expects that the Bankruptcy Court will hold hearings on the first-day motions following the Columbus Day holiday observed in the U.S. and, in the interim, will approve bridge orders granting interim relief with respect to employees and business operations, continuing vendor relations and customer practices pending the Court's consideration of first-day hearings. Delphi will issue a further press release this weekend regarding the Bankruptcy Court's consideration of Delphi's request for the entry of interim bridge orders and providing further information about its chapter 11 reorganization cases including the date, time and location of the hearing on Delphi's first day motions. Among other matters, the relief anticipated from the Bankruptcy Court this weekend and at the first day hearings next week would permit the company to continue to pay wages, salaries and current benefits of U.S. hourly and salaried employees and certain retiree benefits without disruption and in the same manner as before the filing. Similar relief for employees in Delphi's subsidiaries outside the U.S. is not required because they will continue to be paid in the ordinary course of business without court supervision. "The Board of Directors, the senior management team and I greatly appreciate the loyalty and support of our employees," said Miller. "Their dedication and hard work are critical to our success and integral to the future of Delphi." Delphi also noted that the execution of its transformation plan through the chapter 11 process may give rise to the incurrence of additional prepetition claims as collective bargaining agreements, executory contracts, retiree health benefits and pension plans, and other liabilities of the company are addressed and resolved to maximize stakeholder value going forward. There is no assurance as to what values, if any, will be ascribed in the chapter 11 cases as to the value of Delphi's existing common stock and/or any other equity securities. Accordingly, the company urges that the appropriate caution be exercised with respect to existing and future investments in any of these securities as the value and prospects are highly speculative. ----------------------------------------------------------------- [00004] DELPHI CORPORATION & AFFILIATES CHAPTER 11 DATABASE ----------------------------------------------------------------- Debtor entities filing separate chapter 11 petitions: Case No. Entity -------- ------ 05-44480 Delphi NY Holding Corporation 05-44481 Delphi Corporation 05-44482 ASEC Manufacturing General Partnership 05-44484 ASEC Sales General Partnership 05-44618 Aspire, Inc. 05-44610 Delco Electronics Overseas Corporation 05-44636 Delphi Automotive Systems Global (Holding), Inc. 05-44596 Delphi Automotive Systems (Holding), Inc. 05-44639 Delphi Automotive Systems Human Resources LLC 05-44589 Delphi Automotive Systems International, Inc. 05-44580 Delphi Automotive Systems Korea, Inc. 05-44640 Delphi Automotive Systems LLC 05-44593 Delphi Automotive Systems Overseas Corporation 05-44570 Delphi Automotive Systems Risk Management Corp. 05-44632 Delphi Automotive Systems Services LLC 05-44558 Delphi Automotive Systems Tennessee, Inc. 05-44586 Delphi Automotive Systems Thailand, Inc. 05-44577 Delphi China LLC 05-44624 Delphi Connection Systems 05-44612 Delphi Diesel Systems Corp. 05-44547 Delphi Electronics (Holding) LLC 05-44638 Delphi Foreign Sales Corporation 05-44623 Delphi Integrated Service Solutions, Inc. 05-44591 Delphi International Holdings Corp. 05-44583 Delphi International Services, Inc. 05-44542 Delphi Liquidation Holding Company 05-44615 Delphi LLC 05-44567 Delphi Mechatronic Systems, Inc. 05-44507 Delphi Medical Systems Colorado Corporation 05-44529 Delphi Medical Systems Corporation 05-44511 Delphi Medical Systems Texas Corporation 05-44633 Delphi Services Holding Corporation 05-44554 Delphi Technologies, Inc. 05-44627 DREAL, Inc. 05-44503 Environmental Catalysts, LLC 05-44573 Exhaust Systems Corporation 05-44626 Packard Hughes Interconnect Company 05-33539 Specialty Electronics, Inc. 05-44536 The Specialty Electronics International Ltd. Chapter 11 Petition Date: October 8, 2005 Bankruptcy Judge: To be assigned Bankruptcy Court: United States Bankruptcy Court Southern District of New York One Bowling Green New York, NY 10004 Telephone (212) 668-2870 Debtors' Restructuring and Bankruptcy Counsel: John Wm. Butler Jr., Esq. John K. Lyons, Esq. Ron E. Meisler, Esq. Skadden, Arps, Slate, Meagher & Flom LLP 333 West Wacker Drive, Suite 2100 Chicago, IL 60606 Telephone (800) 718-5305 Fax (312) 407-0411 - and - Kayalyn A. Marafioti, Esq. Thomas J. Matz, Esq. Skadden, Arps, Slate, Meagher & Flom LLP Four Times Square New York, NY 10036 Telephone (800) 718-5305 Fax (212) 735-2000 Debtors' Special Corporate Counsel: Douglas P. Bartner, Esq. Shearman & Sterling LLP 599 Lexington Avenue New York, NY 10022 Debtors' Special Labor Counsel: Robert A. Siegel, Esq. Tom Jerman, Esq. O'Melveny & Myers LLP 400 South Hope Street Los Angeles, CA 90071-2899 Telephone (213) 430-6000 Fax (213) 430-6407 Debtors' Special Employee Benefits Counsel: Lonie A. Hassel, Esq. Groom Law Group Chartered 1701 Pennsylvania Avenue, NW Washington, DC 20006-5893 Telephone (202) 857-0620 Fax (202) 659-4503 Debtors' Special Conflicts Counsel: Albert Togut, Esq. Togut, Segal & Segal LLP One Penn Plaza New York, NY 10119 Debtors' Financial Advisor and Investment Banker: David L. Resnick Managing Director Rothschild Inc. 1251 Avenue of the Americas New York, NY 10020 Telephone (212) 403-5252 Fax (212) 403-5454 Debtors' Restructuring and Financial Advisors: Randall S. Eisenberg Senior Managing Director FTI Consulting Inc. Park One Center 6100 Oaktree Blvd., Suite 200 Cleveland, OH 44131 Telephone (216) 986-2750 Fax (216) 986-2749 Debtors' Claims & Noticing Agent: Eric S. Kurtzman, Esq. Kurtzman Carson Consultants LLC 12910 Culver Boulevard, Suite I Los Angeles, CA 90066 Telephone (310) 823-9000 Fax (310) 823-9133 Counsel to the Prepetition Lenders: Kenneth S. Ziman, Esq. Robert H. Trust, Esq. Simpson Thacher & Bartlett LLP 425 Lexington Avenue New York, NY 10017 Counsel to the DIP Lenders: Donald S. Bernstein, Esq. Davis Polk & Wardwell 450 Lexington Avenue New York, NY 10017 United States Trustee: Deirdre A. Martini, Esq. Office of the U.S. Trustee 33 Whitehall St., Suite 2100 New York, NY 10044 ----------------------------------------------------------------- [00005] LIST OF DEBTORS' 50-LARGEST UNSECURED CREDITORS ----------------------------------------------------------------- Delphi Corp. and its debtor-affiliates delivered a list of the creditors holding the fifty largest unsecured claims on a consolidated basis to the U.S. Bankruptcy Court for the Southern District of New York. The list is prepared in accordance with Rule 1007(d) of the Federal Rules of Bankruptcy Procedure. This list does not include (1) persons who come within the definition of an "insider" set forth in 11 U.S.C. Sec. 101(31), or (2) secured creditors, unless the value of the collateral is such that the unsecured deficiency places the creditor among the holders of the fifty largest unsecured claims. Nature Creditor of Claim Claim Amount -------- -------- ------------ General Motors Corporation 300 Renaissance Center P.O. Box 300 Detroit, MI 48265-3000 Tel: 313-665-4898 (Legal) Trade Tel: 313-556-5000 (Main) Warranty Fax: 517-272-3709 and Attn: Attn: John Devine, CFO Other Unknown International Union of Electronic, Electrical, Salaried, Machine and Furniture Workers - Communications Workers of America 501 3rd Street N.W., 6th Floor Washington, D.C. 20001 Tel: 202-434-1156 Wages Fax: 202-434-1343 and Attn: James D. Clark, Benefits Unknown Pension Benefit Guaranty Corp. 1200 K Street, N.W. Washington, D.C. 20005 Tel: 202-326-4020 Fax: 202-326-4112 Attn: Jeffrey Cohen, Pension Chief Counsel Guaranty Unknown United Auto Workers 8000 E. Jefferson Detroit, MI 48214 Tel: 313-926-5000 Fax: 313-823-6016 Wages Attn: Richard Shoemaker, Vice and President & Director GM Dept. Benefits Unknown United Steel Workers 5 Gateway Center Pittsburgh, PA 15222 Tel: 412-562-2400 Wages Fax: 412-562-2484 and Attn: Leo W. Gerard, President Benefits Unknown Wilmington Trust Company Corporate Trust Office 6.55% Notes 1100 North Market Street due 2006 $500,000,000 Rodney Square North 6.50% Notes Wilmington, DE 19890 due 2009 $500,000,000 Tel: 302-636-6058 6.50% Notes Fax: 302-636-4143 due 2013 $500,000,000 Steven M. Cimalore, 7.125% Notes Vice President due 2029 $500,000,000 Law Debenture Trust Company of New York Corporate Trust Office 780 Third Ave, 31st Floor New York, NY 10017 Tel: 212-750-6474 Fax: 212-750-1361 - and - Wilmington Trust Company Corporate Trust Office 1100 North Market Street Rodney Square North Wilmington, DE 19890 Tel: 302-636-6058 Fax: 302-636-4143 Junior Attn: Patrick Healy, VP Subordinated and Steven M. Cimalore, VP Notes $412,371,975 Flextronics Int'l Asia Pacific 2 Robbins Road Westford, MA 01886 Tel: 978-392-3015 Fax: 978-392-3011 Attn: Joe Minville, Sr. Director, Business Development, Global Automotive Markets Trade $40,781,535 Freescale Semiconductor Inc 6501 William Cannon Drive West Austin, TX 78735-8598 Tel: 512-895-2093 Fax: 512-895-8746 Attn: Paul Grimme, Senior Vice President and General Manager, Transportation and Standard Products Group Trade $22,710,027 Robert Bosch Corporation 38000 Hills Tech Drive Farmington Hills, MI 48331-3417 Tel: 248-848-2555 Fax: 248-848-6505 Attn: Linda Lynch, Sales Manager, General Motors N.A. Trade $15,069,265 Siemens Automotive Ltd 2400 Executive Hill Blvd. Auburn Hills, MI 48326-2980 Tel: 248-209-5874 Fax: 248-209-7877 Attn: Peter H. Huizinga, Sales Manager, North American Sales Trade $13,619,300 PBR Automotive USA Pacific Group Ltd 140 Ellen Drive Orion Township, MI 48359 Tel: 248-340-1290 Fax: 248-377-4939 Attn: Gordon Diag, VP Trade $10,542,285 DMC 2 Canada Corporation 2347 Commercial Drive Auburn Hills, MI 48326 Tel: 248-292-2261 Fax: 248-340-2471 Bill Staron, Senior VP Trade $8,976,696 NEC Electronics Inc Three Galleria Tower 13155 Noel Road, Ste 1100 Dallas, TX 75240 Tel: 972-855-5126 Fax: 972-655-5133 Attn: Jim Trent, General Manager, Automotive SBU Trade $8,896,819 HSS LLC 5446 Dixie Highway Saginaw, MI 48601 Tel: 989-777-2983 Fax: 989-777-4818 Attn: David Bader, President Trade $8,296,550 Tyco Electronics Corp Amperestrabe 12-14 Bensheim, Germany D-64625 Tel: 49-0-62-51-133-1-202 Fax: 49-0-62-51-133-1-548 - and - Tyco Electronics Corp P.O. Box 3608 Harrisburg, PA 17105-3608 Tel: 717-592-2298 Fax: 717-592-7555 Attn: Dr. Jurgen W. Gromer, Vice President Tyco International Ltd., President and CEO Tyco Electronics Corp. Trade $8,278,304 Molex Inc 222 Wellington Court Lisle, IL 60532-1682 Tel: 630-718-5888 Fax: 630-813-5888 Attn: Ron Schubel, Executive Vice President, President Americas Region Trade $8,014,656 Panasonic Automotive 26455 American Drive Southfield, MI 48034 Tel: 248-447-7111 Fax: 248-447-7008 Attn: Vince Sarrecchia, President, Headquarters Trade $7,429,854 Olin Corp 427 N Shamrock Street East Alton, IL 62024-1174 Tel: 618-258-26664 Fax: 618-258-3481 Attn: Devin Denner, Sales Manager Trade $7,231,721 Methode Electronics Inc 7401 W. Wilson Chicago, IL 60706 Tel: 708-867-6777 Fax: 708-867-3288 Attn: Don Duda, President Trade $6,397,471 SGS Thompson Victor Park West 19575 Victor Parkway Livonia, MI 48152 Tel: 734-953-1711 Fax: 734-462-4034 Scott Shilling, Sales Director Trade $6,386,126 Philips Semiconductors 1817 Dogwood Drive Kokomo, IN 46902 Tel: 765-868-3861 Fax: 765-452-9915 Attn: Sam L. Trency, Global Account Manager, Kokomo Trade $6,242,258 Infineon Technologies P.O. Box 80 09 49 Munich, Germany 81609 Tel: 49-0-89-234-8-52-00 Fax: 49-0-89-234-8-52-02 - and - Infineon Technologies St.-Martin-Strasse 53 Munich, Germany 81669 Attn: Peter Bauer, Executive Vice President Trade $5,582,352 Aw Transmission Engineering Aisin Seiki Co Ltd Metro West Industrial Park 14933 Keel St Plymouth, MI 48170 Tel: 734-416-1162 Fax: 734-416-3844 Ryo Ishibashi, Sales Contact - and - Kenji Ito, VP - and - Larry Khaykin, Sr. Sales Manager Trade $5,509,700 Applied Bio Systems 850 Lincoln Centre Drive Foster City, CA 94404 Tel: 650-638-6431 Fax: 650-638-5998 Attn: Ann Wagoner Trade $5,491,366 Alps Automotive Inc 1500 Atlantic Blvd. Auburn Hills, MI 48326 Tel: 248-393-7626 Fax: 248-391-1564 Attn: Muneki Ishida, General Sales Manager Trade $5,182,441 Texas Instruments Inc 12900 North Meridian Street Suite 175 Ms 4070 Carmel, IN 46032 Tel: 317-574-2626 Fax: 317-573-6410 Attn: Brent Mewhinney, US Automotive Sales Manager Trade $5,041,608 Hitachi Automotive 955 Warwick Rd Harrodsburg, KY 40330 Tel: 248-482-0085 Fax: 248-474-5097 - and - Hitachi Automotive 34500 Grand River Avenue Farmington Hills, MI 48335 Attn: Darrell Seitz, Senior Account Manager Trade $4,979,093 Sharp Electronics Corp 2613-1, Chinomoto, Cho, Tenri Nara, Japan 632-8567 Tel: 81-743-65-4317 Fax: 81-743-65-2809 Attn: Akihiko Imaya, Group Deputy General Manager Trade $4,974,247 Semiconductor Components 2000 S County Trail East Greenwich, RI 02818 Tel: 734-953-6848 Fax: 734-953-6860 Attn: Lance Williams, Director of Sales Trade $4,865,672 TRW Automotive 12000 Tech Center Drive Livonia, MI 48150 Tel: 734-266-3507 Fax: 734-266-5704 Attn: John Nielsen, Director, Sales Trade $4,821,907 ISI of Indiana Inc 1212 East Michigan St. Indianapolis, IN 46202 Tel: 317-631-7980 Fax: 317-631-7981 Attn: Brad Countryman Trade $4,760,039 Traxle Manufacturing Ltd 25300 Telegraph Rd. Ste 450 Raleigh Office Center Southfield, MI 48034 Tel: 248-355-3533 Fax: 248-355-3558 Attn: Russ Pollack, Director of Sales Trade $4,744,747 Waupaca Foundry Inc 311 S Tower Rd Waupaca, WI 54981-0249 Tel: 715-258-6611 Fax: 715-258-1712 Gary Thoe, Chairman Trade $4,684,195 Hitachi Chemical Asia Pacific Bedok Plant: 20, Bedock South Road Singapore, Singapore 469277 Tel: 6241-9811 Fax: 5455-407 - and - Hitachi Chemical Asia Pacific Loyang Plant: 32, Loyang Way Singapore, Singapore 508730 Tel: 6542-8511 Attn: Y. Yokoya, Deputy Managing Director Trade $4,562,688 American Axle & Manufacturing Inc. One Dauch Drive Detroit, MI 48211-1198 Tel: 313-758-4217 Fax: 313-974-2870 Attn: Joel Robinson, President - and - Bob Finn, CEO Trade $4,525,561 TDK Corporation Of America 1221 Business Center Drive Mount Prospect, IL 60056 Tel: 847-803-6100 Fax: 847-803-1125 Attn: Frank H. Avant, President Trade $4,466,206 Pioneer Industrial Components (Pioneer Automotive Electronics Sales, Inc.) 22630 Haggerty Road Farmington, MI 48335 Tel: 248-449-6799 Fax: 248-449-1940 Attn: Kevin M. Martin Senior VP, Sales Trade $4,189,855 Fujitsu Ten Corporation 46029 Five Mile Road Plymouth, MI 48170 Tel: 734-414-6651 Fax: 734-414-6660 Attn: Chet Korzeniewski, V.P., Sales and Marketing Trade $4,156,580 Solectron De Mexico SA de CV Solectron Invotronics 26525 American Drive Southfield, MI 48034 Tel: 248-263-8714 Fax: 248-263-8701 Attn: Ed Mike, Sales Manager Trade $4,129,744 TI Group Automotive System 12345 E Nine Mile Warren, MI 48090 Tel: 586-755-8312 Fax: 586-427-3175 Attn: Tim Kuppler, Vice President Trade $3,990,388 Timken Company 31100 Telegraph Road, Suite 270 Bingham Farms, MI 48025 Tel: 248-554-4882 Fax: 248-433-2253 Attn: Brian Ruel, Director, Sales Trade $3,619,957 Engelhard Corporation 101 Wood Ave Iselin, NJ 08830 Tel: 732-205-6497 Fax: 732-906-0337 Attn: Barry Perry, Chairman & CEO Trade $3,577,915 Cataler North America Corp. 7800 Chihama Kakegawa-City Shizuoka, Japan Tel: 81-537-72-3131 Fax: 81-537-72-2829 Attn: Hironobu Ono, President Trade $3,462,855 Pechiney Rolled Products 39111 W Six Mile Rd. Livonia, MI 48152 Tel: 734-632-8484 Fax: 734-632-8483 Attn: Jim Offer, Sales Manager Trade $3,393,879 Autocam Corporation East Paris Avenue Kentwood, MI 49512 Tel: 616-541-8551 Fax: 616-698-6876 Attn: Scott Dekoker, Customer Manager Trade $3,352,518 Futaba Corp Of America 2865 Wall Triana Hwy Huntsville, AL 35824 Tel: 256-461-7348 Fax: 256-461-7741 Attn: Joe M. Dorris, President Trade $3,350,622 Victory Packaging 3555 Timmons Lane, Suite 1440 Houston, TX 77027 Tel: 713-961-3299 Fax: 713-961-3824 Attn: Robert Egan, President Trade $3,327,441 Murata Electronics North 2200 Lake Park Drive Smyrna, GA 30080-7604 Tel: 770-433-7846 Fax: 678-842-6625 Attn: David M. McGinnis, Director Automotive Sales Trade $3,234,841 Niles USA Inc 41129 Jo Drive Novi, MI 48375 Tel: 248-427-9700 Fax: 248-427-9701 Attn: Michael Rudnicki, Account Manager - and - Scot McColl, Business Unit Manager Trade $3,171,181 ----------------------------------------------------------------- [00006] DEBTORS' MOTION FOR JOINT ADMINISTRATION OF CASES ----------------------------------------------------------------- Delphi Corp. sought and obtained an order from Judge Gonzalez authorizing and directing joint administration of the 38 chapter 11 cases filed by its direct or indirect subsidiaries with its chapter 11 case. The Debtors provided Judge Gonzalez with a corporate organization chart showing how each debtor is related to the other. A copy of that chart is available at http://bankrupt.com/misc/DPHChart.pdf at no charge. The Debtors make it clear that their request, pursuant to Rule 1015 of the Federal Rules of Bankruptcy Procedure, is for procedural purposes only. The Debtors are not asking the Court to substantively consolidate or otherwise co-mingle their assets at this juncture. Judge Gonzalez approved the Debtors' request, finding that there's no need for the Debtors to file 39 copies of each pleading or send creditors 39 copies of each notice required under the Bankruptcy Code and Rules. Judge Gonzalez directs that all pleadings and papers filed in Delphi's cases be captioned: UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK - - - - - - - - - - - - - - - - x : In re : Chapter 11 : DELPHI CORPORATION, et al., : Case No. 05-44481 : Debtors. : (Jointly Administered) : - - - - - - - - - - - - - - - - x ----------------------------------------------------------------- [00007] DEBTORS' MOTION FOR AUTHORITY TO USE CASH COLLATERAL ----------------------------------------------------------------- As of October 8, 2005, Delphi Corporation says it owes approximately $2,579,783,051.85 under its Prepetition Credit Agreement -- that certain Third Amended and Restated Credit Agreement, dated as of June 14, 2005, among Delphi, as borrower, JPMorgan Chase Bank, N.A., as administrative agent, the lenders from time to time party thereto, Citicorp USA, Inc., as syndication agent, Credit Suisse First Boston, Deutsche Bank AG, New York Branch, and HSBC Bank USA, as co-documentation agents for the revolving facility, Deutsche Bank AG, New York Branch, as documentation agent for the term facility, J.P. Morgan Securities Inc. and Citigroup Global Markets Inc., as joint bookrunners for the revolving facility, J.P. Morgan Securities Inc., Citigroup Global Markets, Inc., and Deutsche Bank Securities Inc., as joint bookrunners for the term facility, J.P. Morgan Securities Inc. and Citigroup Global Markets, Inc., as joint lead arrangers -- for: $1,500,000,000.00 on account of Revolving Loans; $988,329,620.59 on account of Term Loans; and $91,453,431.26 of L/C Reimbursement Obligations. ----------------- $2,579,783,051.85 ================= Delphi's obligations, as borrower, and the Subsidiary Debtors' obligations, as guarantors, are secured by security interests in substantially all of the material tangible and intangible assets of Delphi and the Existing Guarantors. The Prepetition Collateral Package does not include about $1.2 billion of receivables generated by Delphi and Delphi Automotive Systems LLC (including in its capacity as successor by merger to Delco Electronics Corporation). In addition, the Prepetition Secured Lenders do not have perfected security interests in: (a) real property located in jurisdictions that impose material real estate recording taxes and other real property to the extent that the Prepetition Secured Lenders did not obtain a valid mortgage or deed of trust or otherwise failed to perfect their security interest therein, (b) real property with a value less than $5 million, and (c) the capital stock of foreign subsidiaries pledged under the Existing Agreements to the extent that local law requirements were not satisfied. A portion of the Revolving Loans may not be secured by Domestic Manufacturing Plant or Facility and shares of stock or indebtedness of any U.S. subsidiary of Delphi that owns Domestic Manufacturing Property. In the ordinary course of their operations, John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, relates, the Debtors generate cash from their use of the Prepetition Collateral pledged to the Prepetition Secured Lenders. The Debtors use this cash in the normal course of their businesses to finance their operations, make essential payments including employee salaries, payroll, taxes, the purchase of goods, materials, and for other general corporate and working capital purposes. As of October 8, 2005, John D. Sheehan, Delphi's Chief Restructuring Officer told Judge Gonzalez, the Debtors have a cash balance of approximately $500,000,000. For the first 30 days of Delphi's chapter 11 cases, Mr. Sheehan projects the company's cash balances will decline: Cash & Investments at Oct. 8, 2005 $500,000,000 Projected Cash Receipts 1,800,000,000 Projected Cash Disbursements (2,425,000,000) DIP Facility Draw 200,000,000 -------------- Projected Change in Cash ($425,000,000) -------------- Ending Cash & Investments $75,000,000 ============== The Debtors ask the Bankruptcy Court for authority to use the Cash Collateral sitting in their bank accounts to pay their ongoing obligations. They also ask the Court for authority to continue using cash that rolls in the door as customers pay their bills. Section 363 of the Bankruptcy Code governs the Debtors' use of property of the estates. Section 363(c)(1) of the Bankruptcy Code provides that: If the business of the debtor is authorized to be operated under Section . . . 1108 . . . of this title and unless the court orders otherwise, the trustee may enter into transactions, including the sale or lease of property of the estate, in the ordinary course of business, without notice or a hearing, and may use property of the estate in the ordinary course of business without notice or a hearing. Section 363(c)(2) of the Bankruptcy Code, however, provides an exception with respect to "cash collateral" to the general grant of authority to use property of the estate in the ordinary course set forth in section 363 of the Bankruptcy Code. Specifically, a trustee or debtor-in-possession may not use, sell, or lease "cash collateral" under subsection (c)(1) unless: (A) each entity that has an interest in such collateral consents; or (B) the court, after notice and a hearing, authorizes such use, sale, or lease in accordance with the provisions of this section." Substantially all cash generated by the Debtors' businesses as of the Petition Date constitutes "cash collateral," as that term is defined in Section 363(a) of the Bankruptcy Code, and is subject to the interest of the Prepetition Secured Lenders. The Debtors seek to use Cash Collateral during the period commencing immediately after the filing of their chapter 11 petitions until the indefeasible payment in full in cash of all Obligations to their Secured Lenders. Kenneth S. Ziman, Esq., at Simpson Thacher & Bartlett LLP, in New York, confirmed that Delphi met with his client, JPMorgan in its role as the Prepetition Agent, to discuss the terms under which the Prepetition Secured Lenders would consent to the Debtors' use of Cash Collateral. The parties agree that the Prepetition Secured Lenders and the Prepetition Agent will receive, as adequate protection: (1) Superpriority Administrative Priority Claims under section 507(b) of the Bankruptcy Code, for the aggregate amount of any diminution in value of the Prepetition Collateral that will be immediately junior to the DIP Lenders' claims; (2) valid and perfected security interests and liens in and on all of the Debtors' right, title, and interest in, to, and under the Collateral securing the Debtors' Obligations under the DIP, immediately junior to the DIP Lenders' postpetition liens; (3) payment, in cash, of all accrued but unpaid interest and fees under the Prepetition Credit Agreement at the non-default rate; (4) monthly cash payments for accruing interest; and (5) payment of JPMorgan's professionals' fees and expenses. On an emergency basis, Judge Gonzalez approved Delphi's request to dip into the Prepetition Lenders' cash collateral and use those funds to operate until a final cash collateral order is put in place and the Debtors have the opportunity to bring their motion for approval of a new $2 billion debtor-in-possession financing facility backed by JPMorgan Chase Bank, N.A., and Citicorp USA, Inc., and priming liens for the benefit of the Postpetition Lenders under that facility. ----------------------------------------------------------------- [00008] DEBTORS' MOTION TO PAY ESSENTIAL CREDITORS' CLAIMS ----------------------------------------------------------------- Delphi Corporation and its debtor-affiliates sought and obtained authority from Judge Gonzalez to continue their Vendor Rescue Program and pay prepetition amounts owed to critical suppliers that are essential to the uninterrupted functioning of the Debtors' business operations. Judge Gonzalez makes it clear that no creditor has any right to compel Delphi to make any payment. Rather, the Debtors have the authority to make the payment if they believe it's in their best interest. John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, explained the import of this program to Judge Gonzalez in graphic terms at the Bridge Order Hearing Saturday afternoon in Manhattan. If Delphi can't obtain parts or services it needs, vehicle production lines stop, plants close, workers lose their jobs, local tax receipts dry up, and communities are wrecked. Mr. Butler related that Delphi spends some $50 million annually doing whatever it takes to protect and maintain a supply chain where inventory turns are measured in hours rather than days. "Failure to pay the Essential Supplier Claims would, in the Debtors' business judgment," John D. Sheehan, Delphi's Chief Restructuring Officer warned, "very likely result in the Essential Suppliers halting their provision of goods and services to the Debtors, in most cases because the Essential Suppliers could not afford to continue to operate their businesses if the Debtors fail to pay their prepetition claims." Delphi stresses that payment of the Essential Supplier Claims is vital to the Debtors' reorganization efforts because the Essential Suppliers are the sole source from which the Debtors can procure the goods and services they provide. Not paying the Essential Supplier Claims would very likely result in the Essential Suppliers' ceasing operations, thereby forcing the Debtors to try to obtain goods and services elsewhere. Replacement goods and services, however, would not be available for a prolonged period and, even then, would likely be available only at a higher price or on terms unfavorable to the Debtors. Those replacement goods might also be incompatible with equipment or systems currently operated by the Debtors, or not be of the quality required by the Debtors and their customers, thereby creating a devastating administrative burden on the Debtors and causing tremendous disruptions to the Debtors' businesses. Indeed, Delphi says, the failure to pay these claims would likely result in: (a) the Debtors' inability to obtain necessary materials to produce their products, (b) temporary shutdowns of the manufacturing facilities of the Debtors and the Debtors' original equipment manufacturer customers within as few as 24 hours from a vendor's failure to timely ship parts to the Debtors (with corresponding potentially catastrophic damage claims), and (c) severe negative effects on the Debtors and the Debtors' OEM customers, which include many of the largest vehicle producers in the United States, and the Debtors' long-term business relationships with those customers. These effects are primarily due to the highly integrated nature of the OEM supply chain, the Debtors' central role in the supply chain, and the OEM customers' stringent quality requirements that significantly limit the availability of alternative sources of supply. Delphi does not intend to disclose publicly the identity of any individual Essential Creditors. Deirdre A. Martini, Esq., representing the U.S. Trustee, told Judge Gonzalez that the Department of Justice will want that detailed information from Delphi. Nobody balked at Ms. Martini's request at Saturday's hearing. Delphi wants authority to spend up to $90 million to pay Essential Supplier Claims -- approximately 6.9% of the Debtors' average $1.3 billion monthly disbursements to trade creditors over the preceding 12 months. In calculating the amount of the Essential Supplier Claims Cap, the Debtors, with FTI Consulting's assistance, carefully analyzed all of their vendors to identify the Debtors' sole source suppliers, whose products are necessary for the Debtors to continue operating their manufacturing facilities. The Debtors then analyzed whether the suppliers provided goods and services pursuant to enforceable long-term contracts and, if so, whether enforcement of those contracts could be accomplished in a timely manner without unduly disrupting the Debtors' businesses. The Debtors also evaluated the financial and operational prospects of their suppliers which are parties to enforceable contracts to identify those suppliers whose financial or operational position is so precarious that if the Debtors' prepetition obligations are not paid, the suppliers' businesses would most likely fail. Delphi used two methods of analysis to determine which of their suppliers were so financially or operationally constrained: -- First, the Debtors reviewed their Financially Troubled Supplier Database, which the Debtors maintain in the ordinary course of their businesses. The FTSD contains information on all suppliers in the Vendor Rescue Program or which the Debtors are actively monitoring because the Debtors have identified those suppliers as high risk. -- Second, the Debtors reviewed supplier information available through Open Ratings, an Internet solution provider that uses business data from inside and outside the enterprise, cleans and unifies this data, and applies proprietary analytics to deliver actionable intelligence on the performance, financial opportunities, and risks presented by the Debtors' suppliers. Utilizing the Open Ratings software, the Debtors can quantify the financial and operational stability of each of their suppliers. Upon development of the FTSD and Open Ratings reports, the Debtors' personnel who are responsible for managing and tracking the Debtors' supplier relationships, and who have an intimate knowledge of the Debtors' supplier base, reviewed and further refined the pool of suppliers which would likely be unable or unwilling to continue to provide critical goods and services if their prepetition claims remain unpaid. FTI concluded that Delphi needed the ability to pay up to $145 million of Critical Vendor Claims. The Debtors didn't want to bring that large of a request to the Bankruptcy Court. Additionally, they didn't want to run the risk of being told "no" in some exceptional cases. That prompted the Debtors to accelerate payments totaling about $76 million to Super-Critical Vendors Thursday and Friday of last week. The Debtors stress that the $90 million amount represents only a small portion of the total amount of prepetition trade claims outstanding for all creditors. It represents the Debtors' best estimate as to the minimum amount that must be paid to only Essential Suppliers: (x) with whom the Debtors have no enforceable long-term contracts, (y) with whom the Debtors have contracts that may be terminable for any reason, or (z) whose financial condition is so distressed that payments to the vendor are necessary for the vendor to survive. To minimize the amount of payments required, the Debtors request authority to identify Essential Suppliers in the ordinary course of their business circumstances warrant. Identifying the Essential Suppliers now would likely cause those suppliers to demand payment in full. When determining whether a creditor is an Essential Supplier, the Debtors, in their sole discretion, will consider, among other things: (1) whether the goods or services the creditor provides can be replaced or acquired on better terms, (2) whether failure to pay prepetition trade claims will require the Debtors to incur higher costs for goods or services postpetition, (3) whether the enforcement of a contract with a vendor who refuses to ship product can be accomplished in a timely and cost-efficient manner without unduly disrupting the Debtors' operations in light of all relevant circumstances, (4) whether failure to pay prepetition trade claims will cause the Debtors to lose significant sales or future revenue, and (5) whether failure to pay prepetition trade claims will cause the Debtors to be unable to meet their commitments to their OEM customers, potentially incurring significant damage claims as a result. For creditors who are not financially troubled and are parties to long-term contracts, Mr. Butler assured Judge Gonzalez, the Debtors intend to enforce the terms of those contracts -- and haul creditors into bankruptcy court if necessary. The Debtors propose to condition the payment of Essential Supplier Claims on the agreement of the individual Essential Suppliers to continue supplying goods and services to the Debtors on MNS-2 payment terms and those other terms and conditions as are embodied in the Delphi's general terms and conditions or other more favorable trade terms, practices and programs in effect between that supplier and the Debtors in the twelve months prior to the Petition Date, or other favorable trade terms as are agreed to by the Debtors and the Essential Supplier. The Debtors reserve the right to negotiate new trade terms with any Essential Supplier as a condition to payment of any Essential Supplier Claim. To ensure that the Essential Suppliers deal with the Debtors on Customary Trade Terms, the Debtors propose sending a form letter to the Essential Suppliers along with a copy of the order granting their motion. That letter, once agreed to and accepted by an Essential Supplier, will be referred to as a "Trade Agreement." The Debtors seek only the authority to enter into Trade Agreements and not a mandate that they do so. The Debtors submit that there may be limited circumstances in which payment to certain Essential Suppliers, prior to or in lieu of the Debtors' and that Essential Supplier's having entered into a Trade Agreement, is necessary to avoid causing irreparable harm to the Debtors' business operations. In those cases, the Debtors seek authority to make payments on account of that Essential Supplier's claims, notwithstanding the fact that following diligent efforts to enter into a Trade Agreement with an Essential Supplier, no Trade Agreement has been reached. To treat those Super-Critical Vendors who received the prefunded payments last week identically to creditors receiving postpetition Critical Vendor Payments from Delphi, the Debtors propose to waive their rights to assert preference claims in exchange for Trade Agreements with the recipients of the prefunded payments. Mr. Butler stressed that Delphi doesn't intend to spend $90 million in the next day or two or three. The purpose of this program, he said, is to give the company the flexibility to make the payments it determines, in its business judgment, are appropriate. It gives Delphi some tools to discipline creditors who attempt to take advantage of the Debtors' plight. Judge Gonzalez asked Mr. Butler about the use of the term "Rogue Supplier" in Delphi's motion papers, wondering if it is a term of art in the automotive industry. "No," Mr. Butler said, "that was my hyperbole." Agreeing with Judge Gonzalez that some creditors might take offense at that term when they see the order approving the program, Mr. Butler directed Skadden's scrivener to change that term to "Non- Conforming Supplier" in the text of the order. ---------------------------------------------------------------- [00009] U.S. TRUSTEE SETS OCTOBER 17 MEETING TO FORM COMMITTEES ---------------------------------------------------------------- Deirdre A. Martini, the United States Trustee for Region 2, will convene an organizational meeting of Delphi's largest unsecured creditors on October 17, 2005, at 10:00 a.m. The meeting will be held in the New York Marriott Marquis Hotel located at 1535 Broadway in Manhattan. Ms. Martini explains that the sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' cases. "This is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code," Ms. Martini emphasizes. Ms. Martini relates that a representative of the Debtors will attend and provide background information regarding the Chapter 11 petitions. Ms. Martini has obtained a list of the Debtors' 200-largest creditors from Delphi, and will send invitations to those 200 creditors. Creditors who want to serve on the Committee are required to complete and return an acceptance form to the U.S. Trustee's office. ---------------------------------------------------------------- [00010] DELPHI NAMES R. DELLINGER AS NEW CHIEF FINANCIAL OFFICER ---------------------------------------------------------------- Acting CFO Appointed Chief Restructuring Officer TROY, Michigan -- October 8, 2005 -- The Board of Directors of Delphi Corp. (NYSE: DPH) today named Robert J. Dellinger as the company's executive vice president and chief financial officer effective immediately. Dellinger, 45, most recently was the executive vice president and chief financial officer for Sprint Corp. He succeeds John D. Sheehan, who was named Delphi's vice president and chief restructuring officer and had served as acting CFO since March 4, 2005. Sheehan will retain his responsibilities as chief accounting officer and controller on an interim basis but his primary focus will be on leading Delphi's restructuring activities. Both Dellinger and Sheehan will be members of the Delphi Strategy Board, the company's top policy- making group. "Bob's sound financial judgment, international experience and strength of leadership will be critical as we move ahead with our global transformation," said Robert S. "Steve" Miller, Delphi's chairman and chief executive officer. "John's leadership as acting CFO has been vital during this transition time and he will bring the necessary focus to Delphi's restructuring efforts in his new role." Prior to joining Sprint in June 2002, Dellinger was president and chief executive officer of GE Frankona Re based in Munich, Germany, with responsibility for General Electric's (GE) Employers Reinsurance Corporations (ERC) European and Asian operations. In his 19-year career at GE, he had diverse financial and operational experiences in both industrial and financial services. In March 1997, he was named an officer of GE and executive vice president and chief financial officer of ERC. He served as manager of finance for GE Motors and Industrial Systems from 1995 to 1997 and was director of finance and business development for GE Plastics Pacific based in Singapore from 1993 to 1995. He spent five years on the GE Corporate Audit Staff and completed the GE Financial Management Program. Dellinger graduated from Ohio Wesleyan University in 1982 with a bachelor of arts in economics and a minor in accounting. He serves on the board of directors of SIRVA, Inc., a NYSE- listed company. For more information about Dellinger and information about Delphi and its operating subsidiaries, visit Delphi's Media Room at http://www.delphi.com/media/ ---------------------------------------------------------------- [00011] DELPHI RECEIVES COURT APPROVAL OF BRIDGE ORDERS ---------------------------------------------------------------- TROY, Michigan -- October 8, 2005 -- Delphi Corporation (NYSE: DPH) announced today that in support of its reorganization efforts it has received interim Court approval to continue to utilize its existing cash management system, as well as approval to continue paying all salaried and hourly employees in the U.S. under Delphi's current compensation and benefit programs. The Honorable Arthur J. Gonzalez of the U.S. Bankruptcy Court for the Southern District of New York entered "bridge" orders Saturday afternoon granting this and other relief, including the authority to continue customer programs. As previously announced, a permanent case assigned Bankruptcy Judge will be selected on Tuesday, October 11, 2005, and the Company anticipates that a full hearing on the "first day" motions will be conducted later that day. The Company will provide further details of the "first-day" hearing when they become known. On Saturday, October 8, Delphi and 38 of its domestic U.S. subsidiaries filed voluntary petitions for business reorganization under Chapter 11 of the U.S. Bankruptcy Code. Delphi's non-U.S. subsidiaries were not included in the filing and will continue their business operations without supervision from the U.S. courts. "We greatly appreciate the Court's prompt entry of these bridge orders," Robert S. "Steve" Miller, Delphi's chairman and CEO. "The relief granted by the Court today will help ensure that there is a seamless transition into Chapter 11 for Delphi's U.S. operations, especially with respect to our U.S. employees who should not experience any disruption in compensation or benefits. We look forward to the hearing on Tuesday and the Court's timely consideration of the remainder of our first-day motions." Mr. Miller stressed that there should not be any immediate impact upon Delphi's plants and facilities or Delphi's employees. "All employees -- both salaried and hourly -- are expected to continue to report to work as always, and our plants should continue normal operations as we continue to meet the quality, scheduling, delivery and production needs of our customers." ---------------------------------------------------------------- [00012] GENERAL MOTORS COMMENTS ON DELPHI CHAPTER 11 FILING ---------------------------------------------------------------- DETROIT, Michigan -- October 8, 2005 -- General Motors Corp. (NYSE: GM) today provided the following [] comments on Delphi Corp.'s (NYSE: DPH) Chapter 11 filing. General Motors Corporation today said it expects no immediate effect on its global automotive operations as a result of Delphi Corporation's Chapter 11 filing. Delphi is GM's largest supplier of automotive systems, components and parts, and GM is Delphi's largest customer. Delphi Corporation filed a petition for Chapter 11 proceedings under the United States Bankruptcy Code for itself and many of its U.S. subsidiaries on October 8, 2005. GM will work constructively in the court proceedings with Delphi, its unions and other participants in Delphi's restructuring process. GM's goal is to pursue outcomes that are in the best interests of GM and its stockholders, and that enable Delphi to continue as an important supplier to GM. Delphi has indicated to GM that it expects no disruption in its ability to supply GM with the systems, components and parts it needs as Delphi pursues a restructuring plan under the Chapter 11 process. Although, the challenges faced by Delphi during its restructuring process could create operating and financial risks for GM, that process is also expected to present opportunities for GM. For example, on the one hand, Delphi or one or more of its affiliates may reject or threaten to reject individual contracts with GM, either for the purpose of exiting specific lines of business or in an attempt to increase the price GM pays for certain parts and components. As a result, GM might be adversely affected by disruption in the supply of automotive systems, components and parts which could potentially force the suspension of production at GM assembly facilities. On the other hand, GM estimates that it currently pays a purchase price premium to Delphi in the aggregate of approximately $2 billion a year above globally competitive market prices for systems, components and parts purchased from Delphi's North American operations. GM believes that a restructuring of Delphi through the Chapter 11 process provides it with an opportunity to reduce or eliminate that purchase price premium, over time, as well as improve the quality of systems, components and parts it procures. Another risk is that various financial obligations Delphi has to GM as of the date of Delphi's filing for Chapter 11, may be subject to compromise in the Chapter 11 proceedings resulting in GM receiving payment of only a portion of the face amount owed by Delphi. GM will seek to minimize this risk by protecting its right of set-off against amounts it owes to Delphi as of the date of Delphi's Chapter 11 filing, currently estimated at $1.2 billion. However, the extent to which these obligations are covered by GM's right to set-off may be subject to dispute by Delphi or its other creditors. Given that the bankruptcy court will resolve any such disputes, GM cannot provide any assurance that it will be able to fully or partially set-off such amounts. The financial impact of a substantial compromise of the $1.2 billion could have a material adverse impact on the financial position of GM. In connection with GM's split-off of Delphi Corporation in 1999, GM entered into separate agreements with the United Automobile Workers (UAW), International Union of Electrical Workers and the United Steel Workers. In each of these three agreements (Benefit Guarantee Agreement (s)) GM provided contingent benefit guarantees to make payments for limited pension and post retirement health care and life insurance benefits (OPEB) to certain former GM U.S. hourly employees who transferred to Delphi as part of the split-off and meet the eligibility requirements for such payments (Covered Employees). Each Benefit Guarantee Agreement contains separate benefit guarantees relating to pension, post retirement health care and life insurance benefits. These limited benefit guarantees each have separate triggering events that initiate potential GM liability if Delphi fails to provide the corresponding benefit at the required level. Therefore, it is possible that GM could incur liability under one of the guarantees (e.g. pension) without triggering the other guarantees (e.g. post retirement health care or life insurance). In addition, with respect to pension benefits, GM's obligation under the pension benefit guarantees only arises to the extent that the combination of pension benefits provided by Delphi and the PBGC falls short of the amounts GM has guaranteed. The Chapter 11 filing by Delphi does not by itself trigger any of the benefit guarantees. In addition, the benefit guarantees expire on October 18, 2007, if not previously triggered by Delphi's failure to pay the specified benefits. If a benefit guarantee is triggered before its expiration date, GM's obligation could extend for the lives of affected Covered Employees, subject to the applicable terms of the pertinent benefit plans or other relevant agreements. The benefit guarantees do not obligate GM to guarantee any benefits for Delphi retirees in excess of the levels of corresponding benefits GM provides at any given time to GM's own hourly retirees. Accordingly, if any of the benefits GM provides to its hourly retirees are reduced, there would be a similar reduction in GM's obligations under the corresponding benefit guarantee. A separate agreement between GM and Delphi requires Delphi to indemnify GM if and to the extent GM makes payments under the benefit guarantees to the UAW employees or retirees. Today, GM received a notice from Delphi, that in the opinion of its Chief Restructuring Officer, it was more likely than not that GM would become obligated to provide benefits pursuant to the benefit guarantees to the UAW employees or retirees. The letter went on to state that Delphi was unable at this time to estimate the timing and scope of any benefits GM might be required to provide under those benefit guarantees. The Benefit Guarantee Agreements between GM and the unions, and the indemnity agreement between GM and Delphi, will be exhibits to the Form 8-K GM will file with the SEC on Tuesday morning October 11, 2005. Any recovery by GM under indemnity claims against Delphi could be significantly limited as a result of the Delphi reorganization proceeding. As a result, GM's claims for indemnity may not be paid in full. For numerous reasons, including but not limited to the following, GM is evaluating whether it is possible to reasonably estimate the financial impact that the Corporation may eventually sustain, if any, due to the benefit guarantees. First, GM does not know whether the obligation to make any payments under the benefit guarantees will be triggered. Second, there are substantial uncertainties regarding the interpretation of the benefit guarantees. Third, it is impossible to predict what the impact of the Delphi bankruptcy will be on the benefits addressed by the benefit guarantees, including whether Delphi will be permitted by the Court to terminate its pension or OPEB plan for hourly workers and retirees or reduce the benefits under those plans, and the magnitude of any changes granted. Fourth, the number of former GM employees who will be covered under the guarantees is unknown. Fifth, the nature and amount of any payments GM may receive from the Chapter 11 estate of Delphi in consideration for Delphi's commitment to indemnify GM for liabilities arising under the benefit guarantees are not presently estimable. Sixth, GM's financial exposure is likely to be effected by the outcome of various negotiations between GM and Delphi, between Delphi and various unions and between GM and those same unions, and the impact of those negotiations on GM is not estimable. Seventh, it is not possible to ascertain the extent to which any payments made by the PBGC will lessen GM's obligations under the pension guarantee. GM continues to evaluate the relevant facts and circumstances in order to make an appropriate determination as to when and to what extent it should record a liability due to the Delphi Chapter 11 filing. GM currently believes that it is not probable that it has incurred a liability due to Delphi's Chapter 11 filing. It further believes that it is not presently able to estimate the amount, if any, it may ultimately pay under the benefit guarantees due to the foregoing uncertainties. The range of GM's contingent exposure extends from there being potentially no material financial impact to the company if the guarantees are not triggered, to approximately $10 to $11 billion at the high end, with amounts closer to the midpoint being considered more possible than amounts towards either of the extreme ends of this range. These views reflect GM's current assessment that it is unlikely that a Chapter 11 process will result in both a termination of Delphi's pension plan and complete elimination of its OPEB plans. With respect to the possible cash flow impact on GM related to its ability to make either pension or OPEB payments, if any are required under the benefit guarantees, GM would expect to make such payments from ongoing operating cash flow and financings. Such payments, if any, are not expected to have a material impact on GM's cash flows in the short-term. However, if payable, these payments would be likely to increase over time, and could have a material impact on GM's liquidity in coming years. (For reference, Delphi's 2004 Form 10K reported that its total cash outlay for OPEB for 2004 was $226 million which included $154 million for both hourly and salaried retirees (the latter of which are not covered under the benefit guarantees), plus $72 million in payments to GM for certain former Delphi hourly employees that flowed back to retire from GM). If benefits to Delphi's U.S. hourly employees under Delphi's pension plan are reduced or terminated, the resulting impact on GM cash flows in future years due to the Benefit Guarantee Agreements is currently not estimable. ---------------------------------------------------------------- [00013] UAW STATEMENT ON DELPHI FILING FOR BANKRUPTCY ---------------------------------------------------------------- DETROIT, Michigan -- October 8, 2005 -- UAW President Ron Gettelfinger and UAW Vice President Richard Shoemaker today issued this statement on the decision by Delphi Corp. to file for Chapter 11 bankruptcy protection: "The UAW [The International Union, United Automobile, Aerospace and Agricultural Implement Workers of America] is deeply disappointed by the decision by the Board of Directors of Delphi Corp. to today file for bankruptcy. "Delphi's decision is obviously an extremely bitter pill for the 25,000 Delphi workers represented by the UAW as well as for the thousands of workers represented by other unions and non- union salaried Delphi employees -- all of whom have worked hard to try to make Delphi's U.S. operations successful. "The UAW is committed to doing everything we possibly can to protect the interests of our active and retired members and their families. Unfortunately, this is not the first time that the UAW has had to deal with a court-ordered corporate restructuring, and we will vigorously use our experience, expertise and resources to represent the interests of UAW-Delphi workers and retirees throughout this process. "Over the past several months, the UAW has engaged in discussions with Delphi to craft a mutually agreeable approach to the company's financial problems that would have enabled Delphi to avoid filing for bankruptcy. We made it clear to Delphi that we were willing to continue discussions and to consider a wide range of options. However, from the outset of talks about a possible bankruptcy filing, Delphi made it clear that the UAW alone could not solve the company's problems. "Delphi today informed the UAW that it was filing for bankruptcy -- more than a week before the new federal bankruptcy law will go into effect. "Delphi's decision would be extremely disappointing under any circumstances, but it is all the more so in light of the company's announcement on Friday -- just one day before filing bankruptcy -- that it had sweetened the severance packages for Delphi's 21 most highly compensated executives because the old severance package was -- as a Delphi spokesperson put it -- 'uncompetitive.' "Once again, we see the disgusting spectacle of the people at the top taking care of themselves at the same time they are demanding extraordinary sacrifices from their hourly workers, engineers, administrative and support staff, mid-level managers and others. All of them deserved better from Delphi's senior executive leadership." *** End of Issue No. 1 *** ----------------------------------------------------------------- For an on-going paid subscription to DELPHI BANKRUPTCY NEWS, please complete and return the subscription form included in this newsletter issue. Future issues of DELPHI BANKRUPTCY NEWS will be distributed to paying subscribers by e-mail. -----------------------------------------------------------------