Auto-Parts Roundup

Tough times continue for several auto parts manufacturers, with Delphi reporting a large loss in April, and Johnson Controls cutting jobs. Meanwhile, AmericanAxle is opening a plant in Eastern Europe to take advantage of cheaper labor.

Andrea Lyn Van Benschoten

Jun 1, 2006

AmericanAxle to Buy Plant in Poland
Automotive supplier AmericanAxle & Manufacturing Holdings Inc. has announced it plans to buy and refurbish a plant in Poland to accommodate manufacturing for the company's European business.

AmericanAxle, which makes driveline systems, said it also purchased 75 acres of land adjacent to the plant. The company has designed a 170,000 square-foot plant that may be built there.

Operations at the existing plant are expected to start later this year. Labor costs in Eastern and Central Europe are typically lower than in the United States.

Delphi Monthly Losses Increase in April
Auto parts supplier Delphi Corp. announced yesterday that its monthly losses more than tripled from March to April as General Motors Corp. (GM) purchased fewer parts from the company.

Delphi reported a net loss of $192 million in April, compared with a loss of $56 million in March. The company took in nearly $1.4 billion in revenues, including $761 million from GM. GM spent nearly $1.1 billion on Delphi parts in March.

Delphi filed for bankruptcy protection Oct. 8. For the period from Oct. 8 to April 30, the company has lost $1.37 billion on $10.4 billion in sales. GM made up 58 percent of Delphi's sales in that period.

Delphi has asked a federal bankruptcy court judge to allow it to void its union contracts if it fails to reach an agreement with its unions and GM to lower wages. Unions have threatened to strike if Delphi imposes lower wages, a move that could cripple GM.

JohnsonControls to Cut 500 Jobs
JohnsonControls Inc. plans to cut 500 jobs through closings and outsourcing at two plants and a distribution center in Michigan within the 12 months.

The Milwaukee-based auto parts maker said yesterday that it will close one plant in Holland, Mich., and outsource some work from a second plant, as well as close a distribution center in Zeeland, Mich..

The company said the changes are part of its effort to reposition its automotive interiors business for future growth, according to Brian Kesseler, group vice president and general manager in North America for JohnsonControls.