DELPHI 2014 Annual Report Download - page 33

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experienced any significant shortages of raw materials and normally do not carry inventories of such raw materials in excess of
those reasonably required to meet our production and shipping schedules.
Commodity cost volatility, most notably related to copper, aluminum, petroleum-based resin products and fuel, is a
challenge for us and our industry. We are continually seeking to manage these and other material-related cost pressures using a
combination of strategies, including working with our suppliers to mitigate costs, seeking alternative product designs and
material specifications, combining our purchase requirements with our customers and/or suppliers, changing suppliers, hedging
of certain commodities and other means. In the case of copper, which primarily affects our Electrical/Electronic Architecture
segment, and aluminum, which primarily affects our Thermal segment, contract escalation clauses have enabled us to pass on
some of the price increases to our customers and thereby partially offset the impact of increased commodity costs on operating
income for the related products. However, other than in the case of copper and aluminum, our overall success in passing
commodity cost increases on to our customers has been limited. We will continue our efforts to pass market-driven commodity
cost increases to our customers in an effort to mitigate all or some of the adverse earnings impacts, including by seeking to
renegotiate terms as contracts with our customers expire.
Seasonality
Our business is moderately seasonal, as our primary North American customers historically reduce production during the
month of July and halt operations for approximately one week in December. Our European customers generally reduce
production during the months of July and August and for one week in December. Shut-down periods in the rest of the world
generally vary by country. In addition, automotive production is traditionally reduced in the months of July, August and
September due to the launch of parts production for new vehicle models. Accordingly, our results reflect this seasonality.
Employees
As of December 31, 2014, we employed approximately 127,000 people (5,000 in the U.S., and 122,000 outside of the
U.S.); 26,000 salaried employees and 101,000 hourly employees. In addition, we maintain an alternative workforce of 37,000
contract and temporary workers. Our employees are represented worldwide by numerous unions and works councils, including
the IUE-CWA, the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers
International Union and its Local Union 87L (together, the “USW”), and Confederacion De Trabajadores Mexicanos. In the
U.S., our employees are represented by only the IUE-CWA and the USW, with which we have competitive wage and benefit
packages.
Environmental Compliance
We are subject to the requirements of U.S. federal, state and local, and non-U.S., environmental and safety and health
laws and regulations. These include laws regulating air emissions, water discharge, hazardous materials and waste management.
We have an environmental management structure designed to facilitate and support our compliance with these requirements
globally. Although it is our intent to comply with all such requirements and regulations, we cannot provide assurance that we
are at all times in compliance. Environmental requirements are complex, change frequently and have tended to become more
stringent over time. Accordingly, we cannot assure that environmental requirements will not change or become more stringent
over time or that our eventual environmental costs and liabilities will not be material.
Certain environmental laws assess liability on current or previous owners or operators of real property for the cost of
removal or remediation of hazardous substances. In addition to clean-up actions brought by U.S. federal, state, local and non-
U.S. agencies, plaintiffs could raise personal injury or other private claims due to the presence of hazardous substances on or
from a property. We are currently in the process of investigating and cleaning up some of our current or former sites. In
addition, there may be soil or groundwater contamination at several of our properties resulting from historical, ongoing or
nearby activities.
At December 31, 2014, 2013 and 2012, the reserve for environmental investigation and remediation was approximately
$21 million, $21 million and $21 million, respectively, of which $7 million, $7 million and $8 million, respectively, related to
sites within the U.S. We cannot ensure that our eventual environmental remediation costs and liabilities will not exceed the
amount of our current reserves. In the event that such liabilities were to significantly exceed the amounts recorded, our results
of operations could be materially affected.