Embattled auto parts supplier Delphi Corp. has asked permission to cancel health care and life insurance benefits for current and future salaried retirees from a bankruptcy judge.
The request seeking to cut benefits of 15,000 salaried retirees by as soon as April 1 was filed Wednesday with U.S. Bankruptcy Court, citing the steep downturn in the overall auto industry in recent months.
The move is expected to save about $70 million annually and $200 million through to 2011, the Associated Press reported.
The Troy, Mich.-based company said cutting the benefits also would allow Delphi to reduce its balance sheet liabilities by $1.1 billion.
Delphi said in the filing that its plan to emerge from bankruptcy protection had been based on assumptions of industry wide light vehicle production of 14.2 million units in 2009 and up to 16.3 million units in 2011.
According to the forecast; the suppliers' former parent, General Motors Corp., is still expected to remain the suppliers' largest customer and be building at least 3.15 million light vehicles in 2009 and up to 3.61 million in 2011.
But the overall industry took a turn for the worse in the fourth-quarter of 2008 and the U.S. based automakers now say that the best the industry will be able to do this year will be about 12 million to 12.5 million units, Delphi said in its filing.
Since October 2005, Delphi Corp. has been operating under bankruptcy protection.
A hearing on the request is scheduled for February 24.