GM supplier Delphi suspends work at China factory

SHANGHAI, China (AP) — U.S. car parts maker Delphi has suspended work at a factory in Suzhou due to shrinking demand amid the global economic slump, a media report and a staff member said Monday.

The factory west of Shanghai in the city of Suzhou makes compressors for General Motors. Calls to the plant rang unanswered Monday.

"The sudden and unprecedented decline in (car) sales globally has resulted in our only customer, General Motors North America, announcing plant closures and plant stoppages," the Hong Kong newspaper South China Morning Post quoted a Delphi internal document as saying.

"Unfortunately our only customer in 2009 is GMNA, and this has placed the Suzhou compressor plant in a very dangerous position," it said.

A staffer on duty at Delphi's Shanghai office, which was closed this week for the New Year holiday, confirmed that the facility had temporarily suspended work due to the slowdown in demand as GM cuts back on output.

The staffer gave only his surname, Zhao, as is common with many media-shy Chinese.

Troy, Michigan-based Delphi is a former subsidiary of General Motors that filed for protection from bankruptcy in October 2005. It has more than $500 million in mainland Chinese assets, the Post report said.

China's own once-booming auto market is seeing sales fall from double-digit growth rates as demand cools.

Delphi was set up as an independent company by GM in 1999. Delphi filed for Chapter 11 bankruptcy protection in 2005. 24 of its 29 plants in the U.S. closed down. A lot of their manufacturing moved to China. Delphi (through its parent GM) was one of the early entries into China, and had invested into factories since 1991.