Delphi requests court OK of battery facility transfer agreement, New Brunswick buyout plan

By Caroline Salls

Pittsburgh, May 30 - Delphi Corp. requested court approval of a transfer agreement under which the company would sell some of the assets of its New Brunswick, N.J., facility to Johnson Controls, Inc. and transfer battery products from its Fitzgerald, Ga., facility to Johnson Controls, according to a Friday filing with the U.S. Bankruptcy Court for the Southern District of New York.

In addition, the company will implement an employee buyout plan for employees of the New Brunswick facility.

According to the motion, the agreement allows Delphi to sell its money-losing New Brunswick facility to a buyer, which has already purchased its worldwide battery business and, thus, is in a unique position to acquire that facility.

The company will also be able to transition production from the Fitzgerald facility, another money-losing battery operation, in an orderly manner that is consistent with the UAW employee buyout program, while meeting Johnson Controls' production requirements.

Johnson Controls will pay $1.00 for the New Brunswick facility and acquired assets plus the value of inventory estimated at $1.7 million.

Delphi said implementation of the New Brunswick employee buyout plan will cost $18 million to $22.8 million, with $12.5 million of that cost to be mitigated by Johnson Controls' reimbursement to be paid at the closing of the transaction.

Under the buyout program, employees who are eligible to retire under the normal or early voluntary provisions as of Aug. 1 would be eligible for a one-time, lump-sum incentive payment in the amount of $35,000 in exchange for their agreement to retire.

Employees with at least 27 and fewer than 30 years of credited service, regardless of age, would be eligible for special voluntary placement in a pre-retirement program under which they would retire without additional incentives when they first accrue 30 years of credited service and receive gross monthly wages of $2,800 to $2,900 depending on their years of credited service.

Employees who are participants in the Delphi hourly rate pension plan may elect to receive a buyout of $140,000 with more than 10 years of service or a buyout of $70,000 with fewer than 10 years of seniority to sever all ties with Delphi except vested pension benefits.

As an alternative, these hourly employees can elect to remain on the active roll for one year and receive one year of health care and a weekly payment of up to $2,403.84, less withholdings, for one year with 10 or more years of seniority or a weekly payment of $1,057.69, less withholdings, for one year with fewer than 10 years of seniority and sever all ties with Delphi, except vested pension benefits at the conclusion of the year.

Employees electing either of these options also would also be eligible for up to $2,100 per year under the terms of the Individual Upward Educational Plan for an additional two years beginning Aug. 1, 2006 and ending July 31, 2008.

Employees at the New Brunswick facility, except those on a leave of absence, who do not choose to participate or who are not eligible to participate in the buyout program, would be eligible for transfer, with seniority, to Johnson Controls effective Aug. 1 with Johnson Controls benefits.

A hearing is scheduled for June 16.

Delphi, a Troy, Mich.-based automotive electronics manufacturer, filed for bankruptcy on Oct. 8, 2005. Its Chapter 11 case number is 05-44481.

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