They're out! Delphi files for Chapter 11 bankruptcy
posted October 12th 2005 7:28AM
Some may know Delphi as one of the major auto parts suppliers in the US, but of course we at Engadget know them first and foremost as the principal supplier of XM satellite radio receivers (and some Sirius receivers as well). What happens from here for XM remains unseen, though—granted, while no bankruptcy is good, Chapter 11 (think "reorganization" proceedings) is still better than Chapter 7 (think "liquidation of assets"), so while XM is going to be left in the lurch for at least a while, Delphi may just spring back to life in what, a year? Maybe two or three? But since we really shouldn't ever count on that (unless Delphi spins off its electronics division, of course), assume you'll be seeing Pioneer trying to pick up their slack right quick, as well as XAct Communications to a more limited degree, or some new hotshot gadget maker looking to score the big new XM contract that just opened up. This could shape up to be a rough holiday season for XM though, that's for sure.
Wow, I wonder how this happened. XM just reached 5 million subs, you think they would be doing well. PErhaps it has somethign to do with the price drops on the Roady2.
@Rishard Chapoteau
Delphi´s satellite radio business is very, very profitable.
the problems are legacy costs etc.....
The problem is them having to pay pensions and health care for life for every UAW member that's ever passed into their employ.
Local media in Michigan reports that it's likely going to be 2007 before they're out of Chapter 11. They'll need to shed some major pounds to make that happen, so it wouldn't be surprising to see the XM business sold to somebody else.
If delphi is making sirius radios, why can't they create one for sirius that is smaller than their current appalingly large size?
Sirius's small portable radio is pretty nice. I believe they call it the Ford Focus.
The coming christmas period really is an important time for both XM and Sirius. At least with Sirius not having all their business with Delphi they may be able to somewhat easily get someone else as a supplier. Though I would assume that they have a fair few stockpiled for the day when Howard comes over.
But from all I've seen Sirius still has to get some decent portable units. The one that was shown a few months back looked pretty good, until it was revealed that it was pretty much just a MP3 player with a Sirius logo on it.
Yea, you gotta respect how sirius made a big break though, basically rediscovering the tape recorder.
Engadget, I must correct your earlier post about the Delphi radios. Delphi does NOT make XM's hardware devices. A company named Flextronics makes them in Malaysia and slaps the Delphi logo on them. In fact, Flextronics and companies like it make so many of our electronics today.
This is what happens when as a large corp, like GM, (and Intel and Cisco) you squeeze your vendors so hard they cannot make a buck.
Delphi is well financed, and will continue operating as usual throughout Ch 11. No shipments will be missed, and new products will be developed. This includes ongoing and agressive R&D into consumer electronics which is a big bright spot.