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Delphi files for bankruptcy protection

Delphi, the US auto parts supplier has filed for Chapter 11 bankruptcy protection.

The company lost £421m in the first half of 2005. Chapter 11 allows a company to continue trading as it sorts out its financial affairs.

Delphi chief executive, Steve Miller warned pension liabilities are pushing firms close to the brink of collapse.

“Unions must relax their pension and healthcare demands if companies are to compete and succeed,” he said.

Miller said he was continuing talks with unions in the hope of prolonging Delphi's life.

"The unions are involved, because our labour contracts are simply unaffordable and must be changed," he told the Financial Times.

"My worries go beyond the auto industry," he continued. "The problem will only grow.

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