Delphi to Spin Off Powertrain Business

Delphi Automotive says it is spinning off its Powertrain Systems operations into a separate company.

The U.K.-based supplier aims to complete the tax-free transaction by March 2018, at which time Powertrain Systems will become an independent publicly traded company. Delphi shareholders will receive shares of Powertrain on a pro-rated basis.

The Powertrain unit accounted for $4.5 billion of Delphi’s $16.7 billion of sales last year. It hasn't been decided yet which company will keep the Delphi name. 

Delphi says the move will allow it to focus on its remaining Electrical/Electronic Architecture and Electronics & Safety operations. These businesses, which employ 145,000 people worldwide, specialize in advanced safety and autonomous driving systems, centralized computing platforms, infotainment units, and signal and power distribution technologies.

The Powertrain group has 20,000 global employees, including 5,000 engineers. It produces propulsion technologies—for combustion engines and electrified systems—power electronics and aftermarket systems.

Tim Manganello, currently an independent director on Delphi’s board, will become non-executive chairman of the new Powertrain company. Manganello previously was chairman and CEO of BorgWarner Inc. Liam Butterworth, currently senior vice president and president, Powertrain Systems, will become president and CEO of the new entity.