SHAREHOLDERS MEETING Delphi eyes new areas for growth, chief says
THE VINDICATOR, YOUNGSTOWN
Expansion into other industries will help the company even out its sales, its chairman said.
By DON SHILLING
VINDICATOR BUSINESS EDITOR
CHAMPION -- Delphi Automotive Systems remains committed to its automotive roots but is looking to other industries for growth, its top official said.
Delphi excels at certain automotive technologies that can be transferred elsewhere profitably, said J.T. Battenberg III, chairman, chief executive and president.
Battenberg spoke to shareholders Wednesday at Kent State University Trumbull Campus, where Delphi conducted its annual meeting. Michigan-based Delphi, the parent company of Delphi Packard Electric Systems, rotates its annual meeting among its divisions.
As an example of its expansion, Battenberg mentioned Delphi's move into connectors. While used in cars and trucks, Delphi connectors also were used in television coverage of this year's presidential inauguration. Such expansion will help the company even out its sales.
"We are an automotive supplier. That is the heart and soul of our company, but we also are trying to move away from the cyclicality of that market," he said.
Loss: Battenberg was questioned by Morris Henry, a shareholder from Michigan, about Delphi's $23 million loss last year in the creation of new businesses, such as its mobile multimedia unit.
Battenberg said the money is an investment in the future and he's confident the business will be profitable.
The mobile multimedia unit had $300 million in sales last year and has 10 new products coming out this year, he said. One new product is an entertainment system that would allow passengers to watch television and play video games in the back seat of a car.
Battenberg said last year was challenging for Delphi because of the decline in auto sales late in the year.
He highlighted several measures the company is taking to deal with lower sales, including a global restructuring to reduce the work force by 11,500 employees, continuing efforts to improve efficiency, new products and better use of the Internet to communicate with suppliers and conduct planning online.
Proposals: Two shareholder proposals were approved and two were rejected.
Approved were proposals to eliminate company provisions designed to make an acquisition of Delphi more difficult and to eliminate staggered terms on the board of directors. Both votes are nonbinding but will be reviewed by the board.
Defeated were proposals that would call for additional reviews of Delphi's operations in Third World countries and for the elimination of management bonuses.
A worker at a Mexican Delphi plant, Lourdes Tenori, said wages and profit-sharing are too low and a company housing program is too expensive.
Representatives of religious groups spoke in support of conducting additional reviews of Delphi's human rights, political, social and cultural policies.
Thomas Wyman, a board director, said Delphi can't be criticized for its foreign operations and has worked with church groups on these issues.
He said Delphi is a model for American companies with plants in Mexico.
Battenberg said wages at Delphi's Mexican plants are above average. Other benefits include paid holidays, life insurance, various bonuses, a pension plan and medical insurance, he said.