Delphi is spinning off its powertrain operations so it can focus on its new main business, autonomous-vehicle tech and other electronics.
What began as a collection of largely unprofitable General Motors component operations has grown into a profitable, nearly $17 billion mega-supplier, but faced with the major changes sweeping through the auto industry, Delphi Automotive PLC is cleaving its business in two.
The supplier is spinning off its powertrain operations, which will adopt the name Delphi Technologies. The main portion of the company will now focus on electrical and electronic technologies, such as autonomous driving, and adopt the name Aptiv PLC.
“Being a one-stop shop is a thing of the past,” explained Glen de Vos, the chief technology officer at Delphi Automotive, who will remain with Aptiv. “We need to be narrower and deeper.”
Delphi has undergone a series of dramatic changes since it was created in 1994 by GM in an effort to shed some of its classic, and largely money-losing, parts and components operations. Over the years, Delphi abandoned some of the most troubled units, either selling them or shutting them down. Nonetheless, the supplier continued to run into a series of challenges. In 2005, it filed for Chapter 11 protection, even as some senior executives, including then-Chairman JT Battenberg were targeted by federal regulators for irregular financial transactions.
(Delphi, BlackBerry partner on self-driving tech. For the story, Click Here.)
The company emerged from bankruptcy four years later – marking the longest run under Chapter 11 protection of any company in U.S. history — significantly slimmed down. But since the end of the recession it has built back up to become one of the auto industry’s biggest suppliers with annual revenues of $16.7 billion.
Delphi's new name, Aptiv, is designed to show its sole focus on self-driving vehicle technology as well as other high-tech endeavors.
The powertrain unit is about all that is really left of the original Delphi spun off from GM, though it is far more than just a metal-bending and forging operation these days. And it will have to continue adapting to change as automakers around the world shift, more and more, away from conventional internal combustion engine technology.
A growing number of manufacturers have, in recent months, announced plans to electrify their line-ups. All Volvo models introduced in 2018 and beyond, for example, will be powered by hybrid, plug-in or fully-electric powertrains. BMW, VW and Mercedes-Benz, among others, promise to offer some form of electrified option for all of their model lines.
“We are uniquely positioned with the technical competency and execution capability to deliver advanced vehicle propulsion systems that help our customers meet increasingly stringent regulatory standards while unlocking the power to support the ever-increasing electrical content being added to vehicles,” said Liam Butterworth, currently senior vice president and president of Powertrain, who will become CEO of Delphi following completion of the spin.
(Click Here for details about Delphi’s partnership with Innoviz.)
Last year, the powertrain unit generated about $4.5 billion in revenues, or a bit more than a quarter of the parent company’s total.
Aptiv, which might be thought of as the digital side of the split, will target another area of the automotive business undergoing rapid and dramatic change. It will target technologies for advanced driver assistance systems, vehicle electrical architectures and both autonomous and fully driverless vehicles.
Just this month, what is still Delphi Automotive inked a deal with Canadian tech firm BlackBerry QNX to develop the underlying operating system for its new self-driving vehicle technology. Delphi is currently operating a small fleet of autonomous prototypes out of its tech center in Pittsburgh. That operation, which goes up against the likes of Google spin-off Waymo, hopes to become a turnkey supplier for automakers who don’t want – or can’t – develop their own self-driving vehicle systems.
Clark, who will remain as CEO of Aptiv, continued, “The vehicle has evolved and so have we. We have expanded upon our heritage of industry firsts with advanced software capabilities and deep systems integration expertise, enabling us to develop intelligent solutions to meet mobility’s toughest challenges. The future demands executional excellence, and this is where Aptiv thrives.
(Delphi, Transdev plan to launch driverless “mobility on demand service.” Click Here for the details.)
“The name, ‘Aptiv,’ reflects knowledge, adaptiveness and drive, as well as an ability to not only envision the future, but to make it real,” said Kevin Clark, currently the president and CEO of Delphi Automotive. He will retain that title in his new role at Aptiv. “The vehicle has evolved and so have we. We have expanded upon our heritage…enabling us to develop intelligent solutions to meet mobility’s toughest challenges.”