Delphi in restructuring talks

We already know that American car-makers are in trouble, now it appears that their car-part makers are also in trouble :

news.yahoo.com, reuters.com :

Delphi Corp was in talks with its former parent company, General Motors, and its main union in an attempt to restructure its U.S. operations and avoid bankruptcy, the auto parts maker said on Friday. Delphi's credit draw may be a message to GM and the United Auto Workers union that the company must cut its wages and benefit costs quickly to avoid Chapter 11 bankruptcy, analysts said. The credit draw down also caused rating agencies to cut their debt ratings on Delphi, which sent the company's bond prices down as much as 7 cents on the dollar.

Delphi, which reported a $403 million net loss in the first quarter, has struggled with high wage and benefit costs since GM spun it off in 1999. As part of the deal, Troy, Michigan-based Delphi inherited GM's contract with the UAW. GM uses billions of dollars of Delphi parts and could be liable for UAW pension and health care costs if Delphi filed for bankruptcy before the union contract ends in September 2007, analysts said.

In addition to operations issues, Delphi has been dogged by accounting improprieties that forced out six executives in recent months. In June, Delphi restated results from the past several years after completing its own investigation.

"180-mile daily commute"

Just idly browsing around forums when I read this post :

"I have a daily commute of 180 miles, round trip ..."

Wow. That's a daily driving distance of some 290 km. That's very, very far, hybrid car or not. How do people live like this?

My daily driving distance is less than 29 km, which is an order of magnitude (10x) less than that, and I'm already grumbling a bit. I've got some colleagues in the team who live within biking distance, you see.

(2005-08-06 15:46:22 SGT) [Musings] Permalink Comments [2]

Big Oil warns of coming energy crunch

peakoil.com (news, forum) -> news.ft.com :

International oil companies have advertising campaigns warning that the world is running out of oil and calling on the public to help the industry do something about it. Most of the executives of the world's five largest energy groups generally maintain that oil projects are viable with the price at which they test a project's viability is within the around $20 a barrel range. But their advertising and some of their companies' own statistics appear to tell a different story.

ExxonMobil, the world's largest energy group, said in a recent advertisement: "The world faces enormous energy challenges. There are no easy answers." And the companies' statistics back up the sentiment. In The Outlook for Energy: A 2030 View, the Irving, Texas-based company forecasts that oil production outside the Organisation ofthe Petroleum Exporting Countries, the cartel that controls three-quarters of the world's oil reserves, will reach its peak in just five years.

Chevron, the US's second-largest energy group, sends a similar message, but goes two steps further. "One thing is clear: The era of easy oil is over. We call upon scientists and educators, politicians and policy-makers, environmentalists, leaders of industry and each one of you to be part of reshaping the next era of energy. Inaction is not an option," was the message in a recent advertising campaign. The company has even set up a website, www.willyoujoinus.com, warning of the pressures of high demand and fewer fields and offering a forum of discussion.

(2005-08-06 12:12:27 SGT) [Energy] Permalink

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