Chinese firm eyes Delphi assets

By Alysha Webb, Automotive NewsXiaoshan, People's Republic of China-Lu Guanqiu, the ambitious chairman of Wanxiang Group, says he is negotiating with Delphi Corp. to acquire some of the financially troubled company's assets in the United States. Wanxiang already owns stakes in six US manufacturing companies that employ about 1000 people. Lu is unlike most Chinese suppliers, who are content to stay home and increase their overseas business with exports. He wants to become a Tier 1 supplier to the major US auto manufacturers with products made in America. "The first step is to sell our products in other countries," says Lu. "The second is to cooperate with foreign companies, sometimes by becoming the controlling shareholder." Wanxiang (pronounced wahn-shong), one of China's most capable suppliers, had global revenue in 2004 of $2600 million and 31 800 employees worldwide. It manufactures universal joints, brake disks, bearings, driveshafts and other products. Delphi spokesman Dave Bodkin declined to comment on Wanxiang: "I can't comment on future business activities." It's not clear which Delphi assets could be sold in the Chapter 11 reorganisation process. Typically it can take several months or years for assets sales to be completed in a large reorganisation case like Delphi's. But Delphi, even before filing Chapter 11 on 8 Oct., put several plants and operations into a buy-sell-or-fix category, a collection known as the Automotive Holdings Group. The group posted operating losses of $957 million on sales of $1860 million during the first nine months of the year, according to Delphi's filings with the US Securities and Exchange Commission. The group's products include steering systems, brakes, half-shafts, batteries, filters, spark plugs, generators and compressors. Pin Ni, president of Wanxiang America, won't comment specifically on Delphi, but says: "Any company that has assets available-Wanxiang will always be ready to buy as long as we can define how we can add value."A longer version of this story is available to Automotive News subscribers at www.autonews.comAutomotive News is a sister magazine to Urethanes Technology reporting weekly and on-line at www.autonews.com."