Delphi Bankruptcy

[UlTiMaTeP]

Originally Posted by Adam Richards

This was actually starting to be noticed around Q4 2004 when they had a nice 4 billion dollar income tax cost incurred (thank you government ). They were starting to lose their footing back in Q3, where they incurred losses of $113million, but the income tax really just decimated them. They lost a further $726million in the Q1 and Q2 of this year, making the likelihood of them being able to keep themselves afloat at their current rate very difficult to say the least.

This is truly going to affect the FIRST community in a very bad way in the next few years, and we can only hope that either the affected teams are kept on the budget or that they are able to find sponsors for the 2007 or 2008 season, depending on if/when the cut occurs.

(Data taken from Hoovers.com)

You have been flamed enough for this, but every corp, unless its a chapter S, pays federal and state income tax, its the reason you have roads, and a High School.

[Rich Kressly]

Originally Posted by UlTiMaTeP

You have been flamed enough for this...

Then why is there a need to respond? As stated before, please stick to the intent of the thread.

[Dennis Jenks]

All,
I know nothing first hand of the Delphi situation so I am not going to comment on that here. However I would like to point out that while Delphi Automotive provides most of the financial support to their teams, it is the work of people like Andy Baker, Dr. Joe, Travis and many others that make the Delphi teams what they are. Speaking from a mentor’s point of view, there is no way a company can compensate you for the amount of time it takes to run a FIRST team. These people do what they do because they like helping kids and they believe in the cause, it’s that simple. In my opinion, the future of FIRST does not lie in the hands of corporations, but in the hearts of the mentors and students (future mentors) involved. The Delphi teams may emerge from this unscathed, or they may have to scale back a bit, but I am confident that they will continue to exist. That said, (and again knowing nothing of the situation) I would like to wish Delphi and their employees nothing but the best during this uncertain time.

[Michael Hill]

This is very bad news in Kokomo. Many jobs in the city, and a lot of the city's economy relies on Delphi. If Delphi goes down and Chrysler follows, our city will surly be in an economic crisis. They are the two biggest employers in our city. The only 2 factories I know if in Kokomo...

[Kyle Love]

Originally Posted by Michael Hill

This is very bad news in Kokomo. Many jobs in the city, and a lot of the city's economy relies on Delphi. If Delphi goes down and Chrysler follows, our city will surly be in an economic crisis. They are the two biggest employers in our city. The only 2 factories I know if in Kokomo...

Theres a few more like Haynes and some other small ones...but nothing close to Delphi and Chrysler. But I doubt the plant in Kokomo would close very soon...I have heard it would be THE last one to close...but thats not coming from a person that would control that so I don't know how true that would really be.

[wilshire]

Delphi has filed for bankruptcy. I'm guessing that things like FIRST sponsorships will be among the first items cut from their budget. What will this mean for Delphi sponsored teams?

Notice the original intent was to discuss the bankruptcy of Delphi Automotives and the POSSIBLE cuts to FIRST related funds that they donate every year. Possible economic crisis of kokomo and related teams losing functions should be discussed elsewhere.

[David Kelly]

Originally Posted by Kyle45

Theres a few more like Haynes and some other small ones...but nothing close to Delphi and Chrysler. But I doubt the plant in Kokomo would close very soon...I have heard it would be THE last one to close...but thats not coming from a person that would control that so I don't know how true that would really be.

This filing does not mean that Delphi is going out of business, it just gives them protections and ability to restructure their company.

I am just worried about my friends and family during this uncertain time. It's still very early and we should not speculate on what could happen because only worsens the situation.

Lets keep everyone in our thoughts and hope for the best.

[Alan Anderson]

FIRST sponsorship is probably not going to fall under the category of "day to day activities". Losing team funding is definitely something worth worrying about, but it's not worth worrying about right away. I'm going to wait to see what the first couple of weeks of activity under Chapter 11 brings before I spend much time dwelling on it.

(By the way, Chapter 11 of the Bankruptcy Code deals with reorganization. It isn't a Chapter 7 "liquidation" bankruptcy, it's seeking protection against creditors and lawsuits while it works on a plan to satisfy them and avoid going out of business.)

[Koko Ed]

Originally Posted by Shu Song

That's terrible. I hope that none of the other automotive companies that sponsor FIRST and its teams file for bankruptcy. That would be detrimental to FIRST and I don't even wanna think about what might happen if something like this did happen.

Well right now it's strictly speculation. If there is something that happens I'm sure the Delphi teams will let everyone know.

Originally Posted by Shu Song

That's terrible. I hope that none of the other automotive companies that sponsor FIRST and its teams file for bankruptcy. That would be detrimental to FIRST and I don't even wanna think about what might happen if something like this did happen.

Look at Team 27. C&A had to drop us a short while back. This stuff's been spiraling down for a while. Unfortunately, a lot of us thought that the bottom had already been hit.

[MikeDubreuil]

I just wanted to say to the employees of Delphi... good luck and that I hope there's a good outcome for you. Your generosity in with your time and dollars has been exemplary for the entire FIRST organization.

[bill smith]

This is happening to other teams with big name sponsors Ford Motor told all its teams (16 of them ) in Sept. No Financial funding for this year.

[KenWittlief]

The company has filed for chapter 11. That is not speculation or second guessing, its the reality of the situation.

Read this report: http://news.yahoo.com/s/nm/20051010/...auto_delphi_dc

and then tell us if you think Delphi is going to close plants, lay people off, ask many employees to take a cut in pay, and then continue to make charitable contributions to HS FIRST teams?

Chapter 11 means the company owes money that it cannot repay: suppliers and creditors. Outside agencies become involved in overseeing how every dollar is spent. How can the company tell a supplier or creditor "we owe you money and cant pay it, but we are still going to donate $50k, or $100k, or $500k to these charitable organizations this year" ?

This is a very serious situation for teams sponsored by the company. From my experience, large companies become tight lipped and very cold at times like these, and you wont get any warning that you are losing your funding, or that you are losing your job until the very day it happens.

Its october 10th, we are well into the school year. I would be busy looking for backup funding for this year incase the company is not able to support your team. That way, you are covered no matter what happens. If you take a wait and see approach, and the worse case hits you, its going to be very hard to fund a team on short notice for this years regionals.

[Alan Anderson]

Originally Posted by KenWittlief

Chapter 11 means the company owes money that it cannot repay: suppliers and creditors.

That's not entirely correct. Chapter 7 is all about being unable to pay one's debts. Chapter 11 is basically about getting some breathing room in order to negotiate ways to satisfy all creditors without selling everything and shutting down operations.

It seems that Delphi's main problem has been an inability to manage the operating costs that were inherited in the split from General Motors. This isn't from a lack of trying; many of the costs have been beyond the company's control. The Chapter 11 filing provides a chance to force a solution to some of the previously unresolvable issues.

[Travis Hoffman]

The wait-and-see approach many have suggested here pertains only to minimizing the uninformed public speculation on the Delphi restructuring and how it affects FIRST and the Delphi-sponsored teams. By no means are we implying that Delphi teams should just sit back and do nothing within their organizations to prepare for the worst. In reality, Team 48's mentors have been well aware of the potential reduction in funding any form of major restructuring may bring, and we've been preparing for this occasion for a long time. Our fundraising and alternate funding levels are such that I can confidently say Team 48 will be a participant in the 2006 FIRST Robotics Competition.

As was mentioned by Joe Johnson and Andy Baker in the other thread started a while back regarding this matter, many Delphi teams have seen a steady reduction in funding from the corporation over the years. As this has happened, many, Team 48 included, have sought out alternate funding sources and employed increased cost-saving measures. Increased reliance on these practices can only benefit us in the event of a more drastic reduction in funding.

But once again, money shouldn't be the primary focus here. Out of all the sources of capital a FIRST team has, I believe human capital is most important. While it certainly is a challenging task, a team's students and teachers can replace lost funding by working harder to fundraise, cut costs, and streamline the team operations. As many teams have found out though, including my own, replacing the experience and leadership of lost local technical mentors can be the most difficult challenge of all.

If any of you would like to find out more facts about Delphi's Chapter 11 filing or bankruptcy law in general, the law firm Delphi has retained to manage the Chapter 11 court proceedings has established a website to release relevant information and/or required documents to the media and the public. This is freely available information:

http://www.delphidocket.com

Hopefully, this site will serve to further reduce/eliminate any speculation and misinformation being posted in this thread.