Ford’s Drive for Prominence in Growing CUV Market Buoyed by Delphi’s Extensive E/E Systems Capability
Responsibility on Pair of Recently Debuted Crossover Vehicles Illustrates Automaker’s Confidence in Delphi’s Systems ’Life-Cycle’ Value
March 23, 2006, WARREN, Ohio -- Delphi Corporation is helping Ford Motor Company’s highly charged pursuit of the white-hot crossover vehicle segment in North America by providing full-vehicle electrical/electronic (E/E) systems support for a pair of recently debuted vehicles.
Ford used January’s North American International Auto Show as the stage to officially introduce the 2007 Edge crossover utility vehicle (CUV), the latest offering in the automaker’s portfolio reflecting its emerging American design direction. Ford also pulled the wraps off the Edge’s luxury market platform mate, the Lincoln MKX, another boldly-styled all-wheel drive CUV offered as a 2007 model-year vehicle.
Delphi is responsible for the E/E technology in both vehicles, and will assemble their related systems and components as part of a business package that offers a clear example of the supplier’s strengthening relationship with Ford.
“We are very excited and encouraged by this opportunity to extend our growing relationship with Ford, and that they continue to demonstrate their trust in Delphi with critical vehicle programs. We feel that confidence is born from Ford’s full recognition of what we bring to their business, the tremendous value that comes from our comprehensive technical resources and our unparalleled ability to fully optimize vehicle systems through architecture capability that’s been fully demonstrated to the customer,” said Douglas R. Gruber, Delphi Packard Electric E/EDS business line executive.
“Delphi’s E/E competencies run throughout the life cycle of the program -- from the up-front architecture design and systems integration activities with Ford to comprehensive support and flawless launch execution,” Gruber continued. “It is with that eye towards complete support that we eagerly look to this critical program and our opportunity to contribute to the success of a launch that our customer views as a major statement to the industry, doing so with products destined to differentiate Ford from the rest of the field.”
Widely viewed as a segment with greater growth prospects than sport-utility vehicles, the North American CUV market continues its meteoric rise, with close to three dozen nameplates available to consumers (through 2007 MY applications) -- a nearly three-fold increase over the CUV menu at the beginning of the decade. Ford’s contemporary design along with innovative features and performance attributes in line with CUV shoppers’ heightened expectations characterize the Edge and MKX, both of which are fueling the automaker’s drive for CUV leadership.
Delphi will play a role in that quest for CUV leadership by delivering E/E systems technology fully optimized in the vehicles’ architecture to meet both of their unique requirements, working with Ford early in the development phase to ensure comprehensive attention to vehicle needs. The supplier is blending vehicle-specific technical advancements, such as a unique performance approach in the vehicle’s custom-designed electrical center, with customer-valued architecture features already proven in existing Delphi-supported programs.
Delphi’s technical expertise first debuted on a Ford North American program with the redesigned Ford Freestar minivan (and Mercury Monterey sibling), the company’s first opportunity to provide full-vehicle E/E architecture design and manufacture responsibility for the customer in the region. That was quickly followed by the 2005 Ford Mustang, for which Delphi also has design-and-build responsibility.
“Those programs have afforded us numerous opportunities to demonstrate technical leadership and differentiating capabilities, which not only have helped bring value to those launches but have strengthened Ford’s bottom-line prospects across other lines,” said Nick Cassudakis, director of North American engineering at Delphi Packard. He noted as one example Delphi’s role in assisting Ford’s development of a new global crimp standard (applying a terminal/connector to a wire). Primarily based on Delphi’s longtime design expertise and crimping process capability, the new standard is expected to drive improved warranty performance.
With the Edge and MKX, Delphi will be providing wiring harnesses for eight North American-produced Ford Motor Co. vehicles.
FORWARD LOOKING STATEMENT
This press release, as well as other statements made by Delphi may contain forward-looking statements within the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, that reflect, when made, the Company’s current views with respect to current events and financial performance. Such forward-looking statements are and will be, as the case may be, subject to many risks, uncertainties and factors relating to the Company’s operations and business environment which may cause the actual results of the Company to be materially different from any future results, express or implied, by such forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, the following: the ability of the Company to continue as a going concern; the ability of the Company to operate pursuant to the terms of the debtor-in-possession (“DIP”) facility; the Company’s ability to obtain court approval with respect to motions in the chapter 11 proceeding prosecuted by it from time to time; the ability of the Company to develop, prosecute, confirm and consummate one or more plans of reorganization with respect to the chapter 11 cases; risks associated with third parties seeking and obtaining court approval to terminate or shorten the exclusivity period for the Company to propose and confirm one or more plans of reorganization, for the appointment of a chapter 11 trustee or to convert the cases to chapter 7 cases; the ability of the Company to obtain and maintain normal terms with vendors and service providers; the Company’s ability to maintain contracts that are critical to its operations; the potential adverse impact of the chapter 11 cases on the Company’s liquidity or results of operations; the ability of the Company to fund and execute its business plan; the ability of the Company to attract, motivate and/or retain key executives and associates; and the ability of the Company to attract and retain customers. Other risk factors are listed from time to time in the Company’s United States Securities and Exchange Commission reports, including, but not limited to the Annual Report on Form 10-K for the year ended December 31, 2004 and its most recent quarterly report on Form 10-Q for the quarter ended September 30, 2005 and current reports on Form 8-K. Delphi disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events and/or otherwise.
Similarly, these and other factors, including the terms of any reorganization plan ultimately confirmed, can affect the value of the Company’s various pre-petition liabilities, common stock and/or other equity securities. Additionally, no assurance can be given as to what values, if any, will be ascribed in the bankruptcy proceedings to each of these constituencies. A plan of reorganization could result in holders of Delphi’s common stock receiving no distribution on account of their interest and cancellation of their interests. As described in the Company’s public statements in response to the request submitted to the United States Trustee for the appointment of a statutory equity committee, holders of Delphi’s common stock and other equity interests (such as options) should assume that they will not receive value as part of a plan of reorganization. In addition, under certain conditions specified in the Bankruptcy Code, a plan of reorganization may be confirmed notwithstanding its rejection by an impaired class of creditors or equity holders and notwithstanding the fact that equity holders do not receive or retain property on account of their equity interests under the plan. In light of the foregoing and as stated in its October 8, 2005 press release announcing the filing of its chapter 11 reorganization cases, the Company considers the value of the common stock to be highly speculative and cautions equity holders that the stock may ultimately be determined to have no value. Accordingly, the Company urges that appropriate caution be exercised with respect to existing and future investments in Delphi’s common stock or other equity interests or any claims relating to prepetition liabilities.
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