Delphi, the General Motors ( GM) car-parts supplier that has been in bankruptcy court for four years, is instituting mandatory vacations for employees as the automotive industry's woes deepen. Delphi may be just the first auto-equipment supplier to introduce shorter work weeks or forced vacations as sales plummet. Other GM, Ford ( F) and Chrysler suppliers are hurting, with 20 appearing on today's Moody's BottomRung list of non-financial speculative-grade companies with the highest probability of default. U.S. car-parts suppliers may seek as much as $25.5 billion in government aid to avoid a collapse. According to a confidential internal document obtained by TheStreet.com, Delphi is instituting three mandatory vacation weeks for 2009, taken during the week of the Independence Day holiday, Thanksgiving and Christmas. Delphi's Mexican operations will also be affected, but for a shorter period during Thanksgiving. Delphi will encourage salaried employees to purchase additional vacation time during 2009. Delphi last month canceled life-insurance and health-care coverage for retirees after a bankruptcy judge called it "good business judgment." This attracted the ire of the National Retiree Legislative Network, whose president, Bill Kadereit, called on President Barack Obama to make good on a campaign promise to reform bankruptcy laws to protect workers and retirees. GM announced last week that it will buy back Delphi's steering division to help the cash-strapped car-parts company. Delphi filed for bankruptcy in 2005 and won approval of a Chapter 11 turnaround plan in January 2007. The company is GM's biggest supplier.
