Delphi to Quit Battery Business

Delphi Corp., once among the world’s biggest makers of automotive batteries, will leave the business after selling a plant to Johnson Controls Inc. as part of a move to focus on other auto parts.

Auto battery production is one of about 10 product lines Delphi is leaving over the next year. The Troy, Mich.-based company plans to focus on niche and high-tech products after it emerges from Chapter 11 protection by mid-2007 and attempts to be competitive as a parts maker.

Delphi sold its New Brunswick, N.J., plant to Johnson Controls effective Aug. 1, according to court documents. Delphi’s remaining plant in Fitzgerald, Ga., will continue supplying Johnson Controls until an undisclosed date in 2007.

Delphi closed its only California facility, a battery plant in Anaheim that employed 300, early last year.

Johnson Controls will pay $1 for the New Brunswick plant and $1.7 million for the plant’s inventory. It also will reimburse Delphi $12.5 million for the cost of an attrition plan to cut the workforce to 100 from 300.

Delphi sold all of its battery-making plants outside the U.S. to Johnson Controls for $212.5 million last year, making Milwaukee-based Johnson Controls the largest auto battery producer. Most of the batteries are sold under retail stores’ private labels.

Shares of Johnson Controls rose $1.17 to $81.48. Delphi’s shares declined 1 cent to $1.65 in over-the-counter trading.

Also on Thursday, Delphi won U.S. Bankruptcy Court approval to offer $135 million in buyouts to encourage more union workers to retire early, as part of a plan to cut labor expenses.

Employees represented by the United Auto Workers and the International Union of Electrical Workers-Communication Workers of America are eligible for the buyouts.