Delphi Swings to Loss, Mulls Bankrupcy

I was reading the news and;_ylt=AnSBl.QPA_Rl5_x.fPyfuwCs0NUE;_ylu=X3oDMTA3bGI2aDNqBHNlYwM3NDk- popped up at me…

I was wondering, how badly is that going to affect FIRST teams that are Delphi-sponsored, if it affects them at all? Sorry, I know this isn’t exactly ‘FIRST in the news’ but since a lot of teams are sponsored by them I figured it’s a relevant issue and I wasn’t sure where to start the thread otherwise

I do not for-see this dramatically effecting us. But who knows? I think Delphi is really committed to the future of engineering and would not cut the entire FIRST program. One great sponsor if you ask me.

I’m sure they care a lot about FIRST and their teams, but going bankrupt might make that support out of their control.

I believe that at that point they would be required to meet some legal requirements regarding their cash-flow, and I’m not sure where FIRST sponsorship falls as far as a court goes…that is against any obligations they might have to employee salaries, benefits, outstanding vendors obligations and/or bond holders.

Now having brought up that, I also think that courts try NOT be be destructive in their restructuring…but like I said, I’m not sure that FIRST would come before the above stuff. (but then perhaps the FIRST stuff is funded through some sort of separate corporation or foundation that have set-up…don’t know)

Bankruptcy does make it hard to continue a program like this, but bankruptcy is also something that often very negatively effects piblic image of the company. My expectation would be that who ever ended taking them over would not stop funding FIRST because by stopping it they would be adding more negatively to thier public image. Besides, in that industry, who might be large enough to take them over that doesn’t know FIRST, and support it in some way?

But if nothing else, I hope they do not reduce thier support. As far back as I can remember, Delphi has been a big supporter of FIRST.

I can’t speak to all the Delphi teams, but as to ChiefDelphi, Delphi has been cutting back on the support given for a number of years.

It is only by the team leaders of ChiefDelphi sheparding resources and continuous pursuit of fund raising that ChiefDelphi has been able to stay afloat. I salute Mike Aubry and Mike Martus. As the funding has been reduced, they have been masters at doing more with less.

We’ll see how this shakes out, but it can’t be a good thing.

Joe J.

The same is true with the TechnoKats. This coming year will be our 15th in FIRST, and our Delphi expenses will be the lowest ever. However, as Joe suggests above, this is nothing new. Each year, our budget is decreased and this year’s planned decrease follows this trend. Our current budget is less than 1/4 the size of our original Delphi cost in '92. Three things have happened to significantly decrease our team costs since our first year:

  1. We moved robot construction out of Delphi’s UAW shop and into our “team shop”. This started to happen in 1995 and was completed in 1999. Before then, many skilled tradesmen were working on the contruction of the robot, therefore charging their project time to the account set up for the team.

  2. FIRST Championships moved from Walt Disney World. Our team saved $15k (per year) when FIRST moved the Championships from Epcot to Houston (and now Atlanta).

  3. FIRST added a local regional (Boilermaker Regional), saving us $3k in hotel costs.

Andy B.

I’m sure Delphi will stick true to their GM heritage and do as much for the community (including FIRST) as possible. But Delphi has to a business, too: Make money first, look good second. There may be hard times ahead for the Delphi teams, and if it comes down to choosing between jobs and FIRST, I’m sure there won’t be any hard feelings from the teams. I know everyone on 27 understood when C&A (who filed for chapter 11 in May) backed out on sponsorship this year. I don’t think it will ever come to this. GM will not and cannot let Delphi go under. If you read the article in the free press ( the whole bankruptcy idea seemed like a scare tactic for GM and the UAW anyway. If I were on a Delphi team, I wouldn’t be too worried; looking for some extra help might not be a bad idea until Delphi starts to turn a profit, though.

Oh, and there’s a way all of you can help! Next time you buy a car, do it at the GM dealer.

The financial troubles of the automotive industry seem to be quite popular on the internet nowadays, but Delphi’s 2nd quarter loss of $338 million is mere pocket change compaired to the $1.2 billion 2nd quarter loss by Visteon. I’ve even read things hinting that a possible DaimlerChrysler split might be in the future, but I find that hard to believe.

Hopefully Delphi could figure out something. I’m sure their FIRST exspenses are tax write-offs and since they’d be paying taxes anyway I’m sure they won’t completely cut off sponsorship. If Delphi goes above and beyond than what they pay in taxes I’m sure there will be cut backs bigger than usual. My former team’s biggest sponsor gave $5,000 dollars a year and cut back drasticly ever since, to this year during the build season our new biggest supporter gave $500 dollars. (eventually after nationals we did get $3,000 from our main sponsor but they werent listed since we thought they wouldn’t come through). Even the teams already poor with little funding are being cut back as well.

The automotive business really isn’t too hot. My dad was a manager at Siemens VDO for like 14 years and then they moved his plant to Mexico (then eventually China) and shut down the Connecticut plant since it was still profitible and they didn’t want to sell it to a compeitior. Then a bunch of the Siemens VDO guys (includeing my dad, his boss, and plant manager) went to TI Automotive (may notice Team 228 lost them as sponsor this year) they shut down most operations in the state last year and then the one plant that was supposed to remain open is also being moved this year.