SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report
(Date of earliest event reported) April 12, 1999
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DELPHI AUTOMOTIVE SYSTEMS CORPORATION
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(Exact name of registrant as specified in its charter)
DELAWARE 1-14787 38-3430473
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(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
5725 Delphi Drive, Troy, Michigan 48098
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (248)-813-2000
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ITEM 5. OTHER EVENTS
On April 12, 1999, Delphi Automotive Systems Corporation issued a press
release announcing that General Motors' Board of Directors has approved the
complete separation of Delphi from General Motors by means of a tax-free spin
off. The content of the news release was as follows:
FULL SEPARATION APPROVED:
DELPHI HIGHLIGHTS BENEFITS OF INDEPENDENCE
TROY, MICH. - With its full separation from General Motors Corporation
(NYSE: GM) approved by the GM board of directors, Delphi Automotive Systems
Corporation (NYSE: DPH) today announced plans to move aggressively forward with
a post-separation business strategy designed to maximize shareholder value and
take full advantage of independence.
Delphi's board of directors voiced its support of the GM decision. "With
independence, Delphi can now fully implement its plans to enhance shareholder
value," said Thomas Wyman, Delphi's lead independent director.
"For as long as full separation has been an option, we have made clear our
intent to focus the business on developing new and advanced automotive
technologies, broadening our customer base, improving manufacturing operations
and creating new business relationships through acquisition or partnerships,"
said J.T. Battenberg III, Chairman, Chief Executive Officer and President of
Delphi. "This action by the GM Board of Directors pushes us forward on the path
to realize our business objectives.
"To the extent that full separation will improve Delphi's opportunities to
grow the business and become more profitable, we all benefit," said Battenberg.
"Sharing this potential with our labor partners and strengthening our
relationship with labor is a high priority throughout Delphi."
"We plan to have our current pension plan benefits fully funded over the
next few years on an economic basis. We expect to start this funding with
contributions of approximately $1.8 billion between separation and the first
part of next year," said Battenberg. Delphi currently does not have hourly
retirees, and anticipates having a small number of hourly retirees in the next
few years.
Battenberg's comments came in the wake of today's decision by the GM Board
of Directors to move forward with the completion of Delphi's separation from GM
by means of a tax-free spin-off. As a result of the board's action, 80.1 percent
of the ownership of Delphi, 452.6 million shares of Delphi common stock now
owned by GM, will be distributed to owners of GM $1-2/3 par value common stock,
and if GM receives a favorable ruling from the Internal Revenue Service (IRS)
prior to May 14, 1999, GM will contribute the other 2.2% of Delphi shares it
owns, 12.4 million shares, to a Voluntary Employee Beneficiary Association
(VEBA) trust which can be used to fund benefits for hourly retirees. If such a
ruling is not received, the additional 2.2 percent of Delphi shares held by GM
also will be distributed to GM stockholders, in which case the same record date
and payment date will be used.
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The spin-off will result in Delphi becoming a fully independent, publicly
traded company on May 28, 1999. One hundred million shares of Delphi common
stock had been sold by Delphi in an initial public offering completed in
February 1999. With 465 million new shares in the marketplace Battenberg today
indicated that the company will take steps to familiarize new Delphi
shareholders with Delphi business strategies.
Battenberg said full separation from General Motors provides a number of
key opportunities for Delphi.
The benefits of separation include:
o Increased Sales to Vehicle Manufacturers Other Than GM: Until today's action
by the GM Board, Delphi's ability to expand sales to major vehicle
manufacturers (VMs) other than GM has been limited by a general reluctance to
source from a supplier owned by a major competitor. Separation from GM lifts
this barrier, and Delphi will - over time be able to substantially grow sales
to VMs other than GM.
o Increased Financial and Strategic Flexibility: Separation will allow Delphi
to quickly execute investment and acquisition or partnership decisions and
will increase flexibility in financing through capital markets. Formerly,
investments required approval from the parent corporation, which balanced
competing requests for capital from several business sectors.
o Potential for Continued Improvement of Organized Labor Relationships: Delphi
has worked hard on its relationship with labor over the last several years,
and is proud of the progress made. We will now independently continue to
pursue improved relations through collaborative efforts with our union
colleagues focused on improving our manufacturing operations and implementing
the Delphi Manufacturing System. Through these efforts we hope to continue to
improve our quality and responsiveness to customer needs, and provide
stability to our business prospects.
Where new non-GM business is concerned, Battenberg today noted that
Delphi continues to receive greater numbers of bid opportunities since the
Initial Public Offering in February 1999, which he said is indicative of non-GM
customer acceptance of products and technology from an independent Delphi.
Recent examples include: $550M in long-term contracts for supply of
modular doors to Navistar International, MAN and two other major OEMs; a $35M
contract to provide ABS and GENIII integral wheel spindle bearings to Daewoo; a
$20M contract for steering wheels and airbags on a 2000MY VW.
"With this kind of reaction by customers we are tremendously excited
by the potential that exists in the marketplace to take advantage of the
benefits of Delphi's full independence," said Battenberg. "This is just the
beginning."
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Delphi Automotive Systems (NYSE: DPH), with headquarters in Troy,
Mich., USA, is a world leader in automotive component and systems technology.
Delphi's 3 business sectors -- Dynamics and Propulsion; Safety, Thermal and
Electrical Architecture; and Electronics and Mobile Communications -- provide
comprehensive product solutions to complex customer needs. Delphi has more than
198,000 employees and operates 168 wholly owned manufacturing sites, 40 joint
ventures and 27 technical centers in 36 countries. Regional headquarters are
located in Paris, Tokyo and Sao Paulo. Delphi can be found on the Internet at
http://www.delphiauto.com.
In this press release, use of the terms expects, intends, believes,
plans and similar words are associated with forward-looking statements that are
inherently subject to numerous risks and uncertainties. Accordingly, there can
be no assurance that the results described in such forward-looking statements
will be realized. The principle risk factors which may cause actual results to
differ materially from those expressed in forward-looking statements contained
in this press release are described in various documents filed by GM and Delphi
with the U.S. Securities and Exchange Commission, including GM's Annual Report
on Form 10-K for the Year Ended December 31, 1998 (at page II-22), and Delphi's
Annual Report on Form 10-K for the Year Ended December 31, 1998 (at page 54).
Stockholders who have questions about technical issues related to
the distribution can call the Information Agent, Morrow & Co., at (800)
566-9058.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DELPHI AUTOMOTIVE SYSTEMS CORPORATION
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(Registrant)
Date: April 12, 1999
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By
/s/Paul R. Free
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(Paul R. Free, Chief Accounting
Officer and Controller)
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