What Caused Delphi's Demise?

Former Employees, Experts All Have Theories

When General Motors spun off Delphi as its own company in 1999, Lahti Samples, of Troy, thought it would be good for Dayton.

"I was excited about it. I thought, this means there's security in my future. They're going to go global," Samples said.

Samples and hundreds of other employees left the company, though, as it went into bankruptcy protection.

Now, the company is in the process of closing or selling four of five plants in the Miami Valley. The company plans to close 21 of its 29 plants nationwide.

Former employees were left wondering what went wrong.

Wright State University economics professor Dr. Robert Premus believes Delphi was in trouble from the start.

"It turns out Delphi had a lot more baggage to carry than most people anticipated," Premus said.

Premus said General Motors knew it had to separate from Delphi to become more agile and flexible.

Some former employees think GM knew Delphi would fail.

Business analyst and Dayton CPA Alan Duvall said he doubts GM anticipated bankruptcy at Delphi.

Duvall said GM may have anticipated several advantages if reorganization were necessary.

"Having Delphi on its own could have could have some definite benefits with the union, closing down plants. It gave them a lot of leverage in that respect," Duvall said.

Former local union President Kenny Woolum said labor and management did try hard to make Delphi work in 1999, but they could not beat the overseas competition.

Woolum now expects Delphi to eventually fade completely from parts manufacturing in the U.S. and move it all overseas.

Premus predicts Dayton will survive the loss of Delphi jobs, just as it survived the dramatic downsizing of NCR Corporation in the 1970s.

Delphi spokesman Lindsey Williams told WHIOTV.COM that what happened is Delphi's customers were not willing to pay more for parts than the products from competitors with lower labor charges.

"We are on track for emergence from bankruptcy in the first quarter of 2008," Williams said.

As for the future of the Dayton facilities, Williams said most will be closing.

“We have eight core facilities and there were 21 that were deemed non-core facilities that will be sold, closed or wound down,” Williams said.

Only the Vandalia plant will remain open as a Delphi facility.

Williams said people who work at the plants were offered early retirement with incentives, flowing back to General Motors or a buyout.

“So there were a number of options that were provided to employees that really provided soft landings as we went through this process,” Williams said.

jim.otte@ whiotv.com