Delphi Corporation and the Luxembourg government jointly announced May 10 that Delphi will not only continue its operations at the site in Bascharage, but also be transferring the headquarters of its Powertrain division to Luxembourg.

Delphi Corporation and the Luxembourg government held a press conference May 10 reassuring the 700 local employees that not only will Delphi continue its operations in Bascharage, but it will also be transferring the headquarters of its Powertrain division to Luxembourg. After 23 years of Delphi presence, the future was starting to look bleak because of fears that, within the framework of Delphi"s "reorganisation', the Luxembourg plant might suffer job cuts or be closed.

On October 8 2005, Delphi filed voluntary petitions for "business reorganisation' under Chapter 11 of the US Bankruptcy Code, and the ripple effects of this action are still being felt. Delphi"s official statement is that their, "Chapter 11 business reorganisation is well financed, well planned and well organised," and that the, "... Chapter 11 process was to preserve the value of the company, and complete its transformation plan designed to resolve Delphi"s existing legacy issues and the resulting high cost structure of its US operations." The cynical see the Chapter 11 filing as a ploy by Delphi to "reorganise" their multi-billion pensions obligation bill.

But it"s happy news locally. Delphi will maintain its Technical Centre and Customer Services as well as the European seat of its Thermal division at Bascharage, while the transfer of its Powertrain division headquarters will result in about 20 local jobs. The President of Delphi Powertrain Systems, Guy Hachey, also said there could be a number of senior executive recruitments among the local population. As mentioned in Le Jeudi, what is especially attractive about this latest announcement for Jeannot Krecké, Minister for Economy and Foreign Trade, is that it falls in line with the strategy of developing industrial "clusters" which theoretically function as magnets for other industry players once a large enough concentration is achieved (as we are seeing in Luxembourg with e-commerce). Equally, this falls in line with the government"s goal of diversifying the economy and making Luxembourg more competitive.

Steven Kiefer, General Manager of Delphi Thermal Systems told paperJam in November 2005 that, "Luxembourg is critical to our European footprint." At the press conference he said that the site in Luxembourg profits from a combination of Delphi initiatives and the favourable local economic environment that will help build, "solid and durable businesses for the future." It is obvious from Keifer"s attestation that the local authorities were anxious to retain a major employer like Delphi, particularly in light of all the recent highly publicised lay-offs.