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Rodney O’Neal transformed Delphi, regrets pension cuts

Delphi CEO Rodney O’Neal, who retired this week at 61 after four decades in the industry, led the auto supplier through a bankruptcy and improbable comeback and now leaves the company in the best financial shape of its 16-year life.


DETROIT — Delphi CEO Rodney O'Neal, who retired this week at 61 after four decades in the industry, led the auto supplier through a bankruptcy and improbable comeback and now leaves the company in the best financial shape of its 16-year life.

Delphi's sales have soared 45 percent to $17 billion last year from $11.7 billion in 2009, the company's final year of a four-year bankruptcy. The auto supplier's stock has nearly quadrupled to about $80 per share from $21.37 in 2011, the year Delphi went public.

Perhaps his most lasting legacy will be successfully diversifying Delphi's client base, no longer relying on GM for 50 percent of revenue as it did in the early 2000s.

His biggest regret? A restructuring plan in 2009 that left about 22,000 salaried retirees with drastically lower benefits. O'Neal, who climbed through GM and Delphi ranks, helped to craft a turnaround plan called "North Star" that radically transformed the company after it filed for bankruptcy in 2005.

O'Neal — CEO since 2007 — talked about the pension cuts, Delphi's resurgence and other issues in a recent interview with the Detroit Free Press. Questions and answers were edited for brevity and clarity.

Q: So, what did happen to the retiree pensions?

A: We were planning to get through this process with the pensions intact. And in the first plan of reorganization that we were at the table to sign, they were intact. And in the second plan of reorganization, they were intact. The pensions actually went away when global financing blew up and we were no longer in control of the (exit) financing.

Even in the midst of that, we worked hard for them to not go to the (Pension Benefit Guaranty Corp.) … It was also one of those lessons that no matter how hard you try, sometimes you don't get it done. And we failed. And lives were changed forever.

Q: I've heard you say that there was a pivotal moment in 2005 when the company adopted a new strategic plan and filed for bankruptcy. Tell us about that moment.

A: Well, it wasn't just a moment. It was a series of evolving things.

By the time we get into 2005, we began to look at, 'OK, where do we take this company?' We developed a plan based on where the world was. We looked at these mega trends and that is where 'safe,' 'green' and 'connected' came from."

It was beautiful, because it transcends boarders, cultures — everybody in the world wants that in some form or another. You want to be safe, you want to be environmentally conscious and you want to be connected — and that was back in '05.

We went from the 119 product lines to down to the 33 that were remaining. And that's the 33 (product lines), basically, that we have today.

Q: How did you wind up getting into the automotive industry? Is this something you always wanted to do?

A: I got into this industry by accident. When I was 17 years old, I wanted to go to school, I wanted to go to Miami University (of Oxford, Ohio), and I wanted to get into computer science. But I didn't have any money to go for more than a half a semester.

My counselor came to me with this opportunity from GM Institute, she said 'Look, you have all the requirements, all the academics, and they are trying to look at diversifying their student body.' I had never heard of GM Institute."

She ultimately filled out the app, put it in my locker, and said 'sign this and send it in.' I just sent it in. Honest to God, I just sent it in.

Q: After four decades in the auto industry, why are you retiring now?

A: There is a point in time where all things end and this is just a great time for personally and I think it's a great time for the company. And I am looking forward to my next journey.

I have not given a lot of thought to what I am going to do. I will tell you what I am not going to do. I am not going to do this anymore. It's just one of those moments in time for me personally. It's been a wonderful experience for me.


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