Delphi President and CEO Rodney O’Neal will retire March 1 and the global parts maker elevates Chief Financial Officer Kevin Clark to chief operating officer and CEO-in-waiting, a key turning point for a company once bound almost entirely to one customer and mired in a 4-year-bankruptcy.
“Nothing has been easy,” says O’Neal, reflecting on the supplier’s last decade.
But the 43-year industry veteran calls today’s Delphi “perfectly put together,” and boasts of its crack leadership team, global footprint, diversified customer base and a “safe, green and connected” product portfolio.
However, it was a long, rocky road to this point for Delphi. It was spun off from parent General Motors in 1999 and for many years the automaker commanded more than half of Delphi’s business. Delphi also drew a majority of its business from a mature North American market, and it focused too much on low-margin items such as brakes, spark plugs and steering racks.
But since its IPO in 2011, Delphi has emerged as a world leader in safety electronics, infotainment and alternative propulsion technologies.
The supplier announced last week it would become the first mass-market manufacturer of automated-driving technologies, which is seen as a major growth area for the industry and one strongly backed by governments in key markets such as the U.S., Europe and China.
In addition, no customer accounts for more than 18% of Delphi’s business and 30% of it is in North America, compared with 70% in 2005.
“We’re tremendously diversified,” says O’Neal, 61, a bit of gadget guy who saw early the promise of automotive electronics and steered Delphi in that direction.
Since returning to public trading, the company’s market capitalization has tripled to $21.4 billion, and Delphi continues to post strong profit but in the most recent quarter O’Neal warned macro-economic headwinds could impede growth. It plans to restructure in South America, where second-quarter revenue plunged 24%.
“We’ve proven we can operate in waters that are not smooth,” he says today. “The world is not always going to cooperate. But we’ve created a company that is flexible and nimble.”
Delphi also finds itself locked in a tax dispute with the U.S. government. It was reincorporated in the U.K. after bankruptcy and considers that its proper tax base, but regulators claim the company is manipulating the law.
And Delphi made headlines earlier this year as the supplier of a defective ignition switch to GM, a part linked to crashes and deaths. O’Neal told lawmakers the switch was designed to the automaker’s specifications.
O’Neal does not indicate whether he plans to remain active in automotive or retire altogether. He leaves Delphi’s CEO seat next year to Clark, who joined the supplier as CFO in 2010. Clark became senior vice president in 2012 and was named executive vice president in 2013.
The 52-year-old Clark began his career in finance at Chrysler, shortly after graduating from Michigan State University with bachelor’s and master’s degrees in finance.
As part of the leadership transition, Mark J. Murphy joins Delphi as CFO and executive vice president. Murphy comes from U.S. Industrial Gases, Praxair, where he was president.
Murphy’s resume includes a number of finance positions with electronics companies and he has an MBA. from Harvard University and a bachelor's degree in business administration from Marquette University.
The appointments of Clark and Murphy are effective Oct. 1.
