DETROIT – Auto industry supplier Delphi Automotive Systems said Monday it will lay off an additional 1,400 employees because of an expected slowdown in vehicle sales next year.
The company, which announced a restructuring plan last March that included the elimination of 11,500 positions, said it expects global sales of $25.5 billion in 2002, down from its $26.1 billion outlook for 2001.
The additional layoffs will come through buyouts, the company said.
Chief financial officer Alan Dawes said he expects vehicle sales for 2002 to drop by almost 2 million units to about 15.2 million, in part because of unfavorable economic conditions and the winding down of zero-interest finance offers from the automakers.
"The first quarter will be a little rough, we see some scheduled down weeks from the automakers, but we do expect some reasonable pickup in the United States by the middle of next year,'' Dawes said.
For 2002, the Troy, Mich.-based company is forecasting net income of $275 million, up from a forecast of $220 million to $225 million in 2001.
The estimate excludes charges of $100 million to $150 million in 2002 and $404 million in 2001, related to Delphi's initial restructuring plan.
The plan included closing or consolidating nine plants and reducing the work force at more than 40 other facilities. The plan also included exiting approximately $900 million of the company's businesses that were under review.
"We are on track to complete these actions by the end of the first quarter of 2002, Delphi chief financial officer Alan Dawes said in a statement.
"`Through the third quarter, we have closed seven of the nine plants and we have reduced the work force by 8,500 positions, the majority through mutual separation programs.'' Dawes said.
Delphi said Monday it will take additional steps to cut costs in 2002 including the consolidation of one North American battery manufacturing plant by the end of the third quarter.
Last Tuesday, Delphi announced it sold off Dayton-based Liteflex, its composite-spring business. Terms were not disclosed.
Delphi Automotive was spun off from General Motors Corp. in 1999, and since then the percentage of its non-GM business has grown from 22 percent to 32 percent. The company said Monday it expects the percentage to grow to 36 percent during 2002.
The company's goal is to have at least half of its business from other customers, said spokesman Steve Gaut.
Get all the stories you need-to-know from the most powerful name in news delivered first thing every morning to your inbox