Delphi sells its suspension arm to the Chinese

[HeilSvenska]

Delphi Signs Agreement to Sell Global Suspension and Brakes Business Company To File Motion Requesting Court Hearings To Approve Bidding Procedures and Authorize Sale of Assets Release Date: March 31, 2009 Troy, Mich. -- Delphi Corporation (PINKSHEEETS: DPHIQ) announced today that it has made further progress with its portfolio transformation and has entered into an asset sale and purchase agreement with BeijingWest Industries Co., Ltd. for the sale of Delphi's remaining global suspension and brakes business. As part of the company's transformation plan announced on March 31, 2006, Delphi identified its brakes and suspension business as non-core product lines that no longer fit into the Company's future strategic framework and could become more profitable and competitive as stand-alone businesses or as part of another organization with the working capital to invest in and support these businesses. Having previously concluded asset sales and business transfers with Bosch, Tenneco and TRW in North America, as well as asset sales and business transfers with SEVA in South America, this proposed sale represents further substantial progress towards the completion of Delphi's transformation plan announced three years ago. As required under the U.S. Bankruptcy Code, Delphi expects to file a motion later today with the U.S. Bankruptcy Court for the Southern District of New York requesting a hearing on April 23, 2009, to approve bidding procedures, and a hearing on May 21, 2009, authorizing and approving the sale of assets. The final sale of the business is subject to court approval and other closing conditions. Delphi anticipates the sale closing during the fourth quarter of 2009. Under the sale and purchase agreement, BeijingWest Industries Co., Ltd. will acquire machinery and equipment, intellectual property and certain real property. Assignment and assumption of certain customer and supplier contracts will also transfer to BeijingWest Industries Co., Ltd. Delphi will carefully manage the transition of the business, and the sale will be completed in coordination with Delphi's customers, employees, unions and other stakeholders. The business today is comprised of approximately 3,000 employees, primarily located in Poland, China, Mexico, France and the United States. More information on this agreement and the court filing will be available at www.delphidocket.com.

Just to let you know how important Delphi is, it makes magneto-rheological suspension for the likes of Audi, Ferrari, and GM. It's equipped on cars like the R8 and the 599GTB.

[RC45]

And sadly Chinese bearings made to Timken specs have been failing at an alarming rate.

The world needs to be prepared for a severe reduction in new car quality over the next decade if the companies that are selling their production arms relocate manufacturing to China.

Chinese quality control seems to be the worst in the world.

[zeus_2011]

Originally Posted by RC45 Chinese quality control seems to be the worst in the world.

If the quality of their electrical goods are anytthing to go by, then we're all in deep sh*t....

[Mattk]

Chinese producers are better than most. Good technology, skilled workers etc. However, a common criticism is that their management structures aren't all too great. It's very top-down and hierarchical, so often, directives are not what's appropriate to on-the-ground operations. You want things to work in China, you need to bring in some of your own people.

[turpija]

they(Chinese) can make quality products but most companies (from outside of china) are tempted to cut the production costs to minimum and in China they can make stuff really really cheap and therefor quality goes down.

but what worries me is that Chinese had been making money this way and now they are going in "shopping" and since the economy sucks they are able to get some cool deals.

[RC45]

Originally Posted by Mattk Chinese producers are better than most. Good technology, skilled workers etc. However, a common criticism is that their management structures aren't all too great. It's very top-down and hierarchical, so often, directives are not what's appropriate to on-the-ground operations. You want things to work in China, you need to bring in some of your own people.

Wrong.

Corruption and thft and bribary is rife.

Products that are engineered to specific standards seldom meet these standards after the initial quality control is tested and reviewed.

Alloys and materials are substituted and changed.

Wheels, tyres, chassis components, brearing, glass products and other structural and safety related items are severly substandard.

Please stop trying to make out China is God's gift to the world - it is not.

It is a dishonest, corrupt, polluted, cruel dictatorship, itnerested in nothing more than global expansion and control of its populaiton.

Any concessions you may see are temporary at best and designed to get money into China and appease some internation group of observers.

The sheer number of faulty wheels, bearing, structural components and other items that are present in vehicle at this time is staggering and frightening.

These are the facts.

This dirty little secret is quite well hidden from the public and their supporters around the world - the motive? profit.

Originally Posted by turpija they(Chinese) can make quality products but most companies (from outside of china) are tempted to cut the production costs to minimum and in China they can make stuff really really cheap and therefor quality goes down. but what worries me is that Chinese had been making money this way and now they are going in "shopping" and since the economy sucks they are able to get some cool deals.

Bingo - this is the strategic blunder the western world has walked right into - eyes wide shut.

This is going to be the gretaest espionage coupe and an even gretaer transfer of wealth, capital and control than compared to when "Japanwas buying up the west".

The difference was that it was private Japanese investment, and was reverersed when Japan went into recession.

These purchases are many and mostly funded with Chinese state backed funds.

How stupdi of the west to have pretty much capitulated and mortgaged themselves to their only one common enemy.

The central Chinese government has never denounced their original expansionist plans from the last 100 years... they are patient and will out pace the west.

[Mattk]

The central Chinese government has never denounced their original expansionist plans from the last 100 years...

Would be true if they had existed for more than 60.

The system of governance China will never change. It will forever be run by the all-powerful oligarchic Politburo. Democracy will fail because it will cause enough instability to fracture China. It's just not going to happen. A completely free market will disperse power too far away from the centre, creating similar dangers. Again, it's just not going to happen. Sucks, but really only for them.

I am well aware that corruption is rife. It is pretty obvious given the extreme reaction of executing all the ones they do find. That's part of the problem. Things will change eventually with the realisation that doing dodgy things like putting melamine in milk powder doesn't help you rip off other countries. It wasn't too long ago when many first world police forces were filled with corrupt officers. The development of effective management strategies and an internal ethical culture will happen due to its necessity. Only with that development can China really move beyond where it is now.

As crap as they are, it's not like things from China completely fall apart. It works well enough for their own needs. There isn't going to be mass carnage on Western roads because an inferior Chinese factory makes the brake and suspension systems. Not as good as before, yes, but not a disaster.

I think this is all peripheral to the main issue here, which is Delphi. They're bankrupt, at least in a theoretical sense. They need to start flogging parts of the business because it's the law. Creditors need to be paid. If it so happens that Beijing West Industries has offered the most money, it would violate the principle of seeking the best price to say no to the sale. It's all really simple. This is not a time for mulling over fears of China taking over the world, China building nuclear weapons, China sabotaging exports etc. Those sorts of issues are for politicians, not businessmen, to handle.

[RC45]

Originally Posted by Mattk Would be true if they had existed for more than 60.

The Chinese have been around a lot longer than 60 years.

I will leave that up to you to read up on.

The regime may have changed but the management style is still the same and has been for 2000+ years.

Originally Posted by Mattk As crap as they are, it's not like things from China completely fall apart. It works well enough for their own needs. There isn't going to be mass carnage on Western roads because an inferior Chinese factory makes the brake and suspension systems. Not as good as before, yes, but not a disaster.

Wrong.

How abotu 90% failure rate among wheel bearing when use outside of smartcar style performance envelopes, with bearings designed for severe duty.

There is a company in Florida with 150,000 junk wheel bearings. These and other products are getting found out before deployment to the manufacturing community due to testing.

Originally Posted by Mattk I think this is all peripheral to the main issue here, which is Delphi. They're bankrupt, at least in a theoretical sense. They need to start flogging parts of the business because it's the law. Creditors need to be paid.

? What?

No they don't. They are just lucky Delphi is in recievership - they could just as easily have been closed up and liquidated for 1 penny and no-one would have got anything.

Creditors face the same risk of zero return in the free market as the debtor does.

Originally Posted by Mattk If it so happens that Beijing West Industries has offered the most money, it would violate the principle of seeking the best price to say no to the sale. It's all really simple.

No it is not. It is a well timed and played strategic move by the Chinese central government. You somehow think all this Chinese business movement around the world in the last 25 years is accidental? Or because of some epiphany experienced by western business leaders? Uhm - no - it is BECAUSE the Chinese central government realised they can beat the west at its own game.

THEY invited the western businesses in, and through a one-sided, cheap labour, protected and manipulated market have palyed the west the entire way.

It is no mistake that the west is indebted to the Chinese - it was very cleverly strategicly played.

It is also a poorly considered and strategically suicidal move by the west to continue this "global business co-operaiton" nonsense with enemy states.

Originally Posted by Mattk This is not a time for mulling over fears of China taking over the world, China building nuclear weapons, China sabotaging exports etc. Those sorts of issues are for politicians, not businessmen, to handle.

Wrong.

They are all one and the same.

By your flawed and corrupt socialist logic, Henry Ford doing business with the Nazis before WWII was ok, because it was "just business". Excpet he helped the Nazi industrialmachine with his "just business" activities.

You build tomorrows strategic strength with todays strategic actions based on yesterdays strategic planning.

[10000rpmlover]

Originally Posted by Mattk Chinese producers are better than most. Good technology, skilled workers etc. However, a common criticism is that their management structures aren't all too great. It's very top-down and hierarchical, so often, directives are not what's appropriate to on-the-ground operations. You want things to work in China, you need to bring in some of your own people.

skilled workers?

you mean the sweat shops full of pre teens? or the countless unpaid young women making upholstery for Buicks?

[SHIZL]

yea this sucks for america more technology sold off. but china is also struggling my housemate spends half his time there and over the last two years they have also been taking hits, china is also a major part of western global econimical structure were there an american company of six equals a company of 30 in china and tax is pretty much non-existent and are most known for the worst quality control and human rights violations in mass production. they (china)are a major support for western global structure. like i tell all my friends and family look at what u buy and look to see were it was designed,made,built,assembled and grown and when available buy what u belive will help ur family,friends,neighbor,neighborhood,town,city,sta te,providence,country and continent and world but most what u belive in. something ive always done will continue to do when available its not always possible to stay away from cheaper stuff but i try and im sure it helps keep some jobs in the local economy

[RC45]

Originally Posted by SHIZL yea this sucks for america more technology sold off. but china is also struggling my housemate spends half his time there and over the last two years they have also been taking hits, china is also a major part of western global econimical structure were there an american company of six equals a company of 30 in china and tax is pretty much non-existent and are most known for the worst quality control and human rights violations in mass production. they (china)are a major support for western global structure. like i tell all my friends and family look at what u buy and look to see were it was designed,made,built,assembled and grown and when available buy what u belive will help ur family,friends,neighbor,neighborhood,town,city,sta te,providence,country and continent and world but most what u belive in. something ive always done will continue to do when available its not always possible to stay away from cheaper stuff but i try and im sure it helps keep some jobs in the local economy

This is very true.

If you live in Brazil, support "made in Brazil' - in Australia "made in Australi" and so on.

Local manufacturing strength is what allows a country/region to survive recession.

The lack of local manufacturing is what is going to really make it hard for the western countries to come out of this recession.

And local manufacturing does mean "protectionism" - it just means a strong local manufacturing sector can exist in many trading partner countries. Having all the service jobs in one and all the manufacturing in the other is not a good scenario.

[10000rpmlover]

Originally Posted by RC45 This is very true. If you live in Brazil, support "made in Brazil' - in Australia "made in Australi" and so on. Local manufacturing strength is what allows a country/region to survive recession. The lack of local manufacturing is what is going to really make it hard for the western countries to come out of this recession. And local manufacturing does mean "protectionism" - it just means a strong local manufacturing sector can exist in many trading partner countries. Having all the service jobs in one and all the manufacturing in the other is not a good scenario.

can we vote for you next election?
bring that to washington along with a swift and decisive end to the federal reserve and IRS and you have my vote

[RC45]

Originally Posted by 10000rpmlover can we vote for you next election? bring that to washington along with a swift and decisive end to the federal reserve and IRS and you have my vote

Sadly my politcal career would end at the first press conference. I would carry an exposed Desert Eagle, and the first time one of the drive-by media would stand up and ask a stupid question, I would pop them in the face with a mercury filled hollow-point.

While this behaviour may get me through the primaries in the southwest, I bet it may not be that well received on the east coast

[Mattk]

Whilst not disputing the negative effect this will have on Delphi's products, I think too much is being made of what is a very narrow business decision.

By your flawed and corrupt socialist logic, Henry Ford doing business with the Nazis before WWII was ok, because it was "just business". Excpet he helped the Nazi industrialmachine with his "just business" activities.

1. I fail to see any form of socialism proposed by what I said. The phrase 'socialist logic' is also an impossibility, so I'm not sure why you're using it.
2. The accusations raised against Ford was that he benefited from slave labour used when the Nazis took over Ford factories - very serious. When you take today's case of selling machinery and intellectual property to an obscure Chinese firm only 51% owned by a state investment company, it just doesn't stack up. It is also not an analogous example as Ford was exactly 'doing business' by selling car parts to Hitler.

[RC45]

Originally Posted by Mattk Whilst not disputing the negative effect this will have on Delphi's products, I think too much is being made of what is a very narrow business decision.

It is a symptom of a bigger problem. Selling off manufacturing to an enemy state. A state that has one of the worst human rights records on the planet.

Beijing West doesnt need Delphi or any of their componant parts, they need the end goal of owning a significant percentage o fmanufacturing in the west.