Delphi would rely on automation to increase U.S. footprint
Delphi Automotive said that if trade policies from U.S. President Donald Trump’s administration push to bring manufacturing into the U.S. from Mexico, it is likely to be automated work, with fewer jobs attached to it.
Joe Massaro, Delphi chief financial officer, told Reuters that 90 percent of the company’s workforce is in “best-cost countries,” which keep its costs down and profits up.
Delphi’s cost of sales value for imported material into the U.S. is about US$ 4 billion. “The majority of that is out of Mexico, about US$ 3.5 billion annually,” Massaro said.
“There are certainly more automated-type manufacturing processes down there that we could conceivably see coming back, or coming to the U.S. We’ll look at that depending on where the rules go, but it would have to be of much more of the automated-type manufacturing operations, just given the labor (cost) differential there,” he said.
About 36% of Delphi’s total sales come from the U.S., but Delphi serves the market mostly from Mexico, according to the companies 2015 annual report. While Delphi has 61,000 employees in Mexico, it has just 5,000 in the U.S., according to the company’s January Automotive Logistics presentation.
Still, shares of the auto parts maker have held on, staying relatively flat since Trump’s election partially due to the company’s headway in the autonomous driving space.