Social Responsibility

Delphi responds to climate change issue

The issue of climate change is receiving increased public debate around the world. The United Nations' Intergovernmental Panel on Climate Change stated in 2007 that the global atmospheric concentration of carbon dioxide (CO2) has increased markedly since 1750 as a result of human activities, with fossil fuel use being a main cause. Warming of the climate system is unequivocal.

Governments, environmental groups, thought leaders, trade associations and others around the world are calling for action and advancing various proposals. The European Union has agreed to an aggressive target to curb CO2 emissions by 20% by 2020. The U.S. has called for negotiations among the world's economic powers to create the framework for a successor agreement to the Kyoto Protocol.

Delphi believes that proactive steps are needed globally. As employees and other stakeholders read about and discuss this topic, they should know that the company:

• has a variety of current and planned fuel efficient products for automakers and non-automotive customers,
• is using less energy and natural resources in our plants and other facilities, and
• is reducing carbon dioxide emissions from our manufacturing processes around the world.

This discussion highlights some of these company efforts, and government options for dealing with the global climate change issue.

As various governments consider various automotive proposals, we know our customers are expressing their views about how proposals affect their competitiveness. And we are ready to provide automakers with products that can help them meet their fuel efficiency objectives. We work through numerous trade associations of automotive suppliers around the world.

Delphi also believes that motor vehicles should not be targeted alone for better fuel efficiency. For example, since road transport is only responsible for 22 percent of U.S. greenhouse gas emissions, cost effective opportunities to improve energy efficiency across all sectors of the U.S. economy must be explored. Efforts should include improved energy codes for new buildings, and new home appliance efficiency standards.

Products
Delphi has been working hard to develop energy-efficient products as our customers react to changing consumer preferences and increasingly stringent government regulations.

Improving Fuel Efficiency -- Examples include:

• Our cylinder deactivation valve-train product selectively "turns off" half of the engine's cylinders under certain driving conditions to improve fuel economy by up to eight percent and reduce emissions.
• Reducing vehicle weight also helps, and Delphi's electrical/electronic architecture designers have succeeded in reducing the mass of a typical system by up to 20 percent while enabling the vehicle to handle increased electrical/electronic demands of the latest powertrain, entertainment, navigation, safety and other components and systems.
• Delphi's evaporative emissions canisters reduce gasoline vapor emissions from vehicles that occur during fuel storage and delivery.
• Diesel engines are nearly 30 percent more fuel efficient than gasoline-powered engines, and Delphi is the world's second largest producer of diesel fuel injection systems and after-treatment systems used in all types of vehicles.
• To enable diesel engines to meet the most stringent clean air standards so consumers have more choices to purchase fuel efficient, diesel-powered vehicles, Delphi has developed an ammonia sensor that allows the use of a new emissions control device to reduce oxides of nitrogen.
• Delphi's HVAC compressors and other components have been engineered to provide industry-leading fuel economy savings. Delphi also is developing HVAC systems that work well with new candidate refrigerants that are more environmentally friendly.
• Delphi's oxygen sensors with planar technology are available both on new vehicles and as replacement parts for vehicles already in use. They put the engine under fuel control operation quicker and have improved durability. Worn-out or contaminated sensors can cause engines to run too rich, burning up additional fuel and sending excess CO2 and other emissions into the atmosphere.
• Delphi's fuel pumps for new and used vehicles can operate using flexible fuels that reduce greenhouse gas emissions.
• Our gasoline direct injection system injects fuel directly into the combustion chamber of each cylinder, rather than into the intake manifold, as in conventional fuel injection. This improves fuel economy.
• Delphi also is involved in hybrid programs, where automakers are taking advantage of our electrical, electronics and integration expertise.
• Our commercial truck battery monitoring device allows drivers to rely more often on the truck's battery to run the heater or air conditioner, and entertainment and communications devices, when the vehicle is at a rest stop or waiting to load/unload. Because the engine doesn't idle for long periods, emissions and fuel consumption are lowered.

Using New Energy Sources -- Our alternative fuel technology is featured on nine vehicle lines sold in the U.S. and South America. More than 2 million vehicles on U.S. roads can operate with Delphi's E85-compatible fuel injectors. And in Brazil, where ethanol is made from locally-grown sugar cane as an automotive fuel, Delphi has been supplying fuel systems that could run on 100 percent ethanol since 1991.

Delphi also is involved in hybrid programs, where automakers are taking advantage of our electrical, electronics and integration expertise. For example, Ford has selected Delphi to be the battery integrator for its hybrid electric vehicle development program. Delphi also is providing power electronic components to another customer for its hybrid vehicle to be introduced in the near future.

Delphi's new Battery IVT Sensor ensures the optimum performance of the vehicle battery. It allows automakers to use smaller batteries and alternators because there's no need for the battery to store excess energy. The sensor plays a key role in various vehicle energy management systems that improve fuel economy and lower CO2 emissions. In one approach, power to accelerate the vehicle comes from the fully charged battery, instead of the engine, with regenerative braking used to quickly recharge the battery.

Fuel cell research also is being undertaken by Delphi. Our focus is on solid oxide fuel cells (SOFC) that can serve as an auxiliary power unit (APU). Using SOFC APUs can help commercial vehicle truck drivers preserve fuel; rather than having to idle a big tractor at a truck stop, rest area or terminal in order to power HVAC/communications/ refrigeration systems, a driver can shut off the engine because the SOFC APU can provide the needed power. An application for military vehicles also is being developed in cooperation with the U.S. Army. Use in recreational vehicles and watercraft also is possible. And SOFCs can provide auxiliary power to electric vehicles so EVs can be driven longer distances before having to stop and re-charge the propulsion batteries.

Products for Non-Automotive Applications -- The development of fuel efficient products goes beyond motor vehicles. One example is a new cooling system component called the heat and mass exchanger, or "Delphi HMX." HMX-equipped fresh air A/C systems for homes, buildings and industrial facilities use only a fraction (as little as 25 percent) of the electricity needed to run traditional systems. This will help utilities keep up with increased demands for electricity when it's the hottest outside. Systems using the Delphi HMX do not use ozone-depleting chemical refrigerants or need compressors. A/C systems using the Delphi HMX actually get more efficient as temperatures rise. Delphi is working with a multitude of customers across the globe to make HMX-based systems readily-available to consumers, individuals and businesses alike.

Efforts in Delphi Plants
Delphi is diligently working on technologies and solutions to take aggressive steps in conserving fuel and creating new energy sources to power our plants. We support voluntary programs such as the Business Roundtable's Climate RESOLVE initiative that seeks to have every company in every sector of the economy undertake voluntary actions to control greenhouse gas emissions.

Delphi efforts to reduce global energy consumption have resulted in significant reductions in energy generated CO2. Efforts continue to reduce energy consumption which will result in further reductions of CO2 emissions from our operations.

Current achievements include:

Reducing Delphi's electricity consumption equal to the electricity required to power some 26,000 homes for a year.

• Reducing Delphi's natural gas consumption equal to heat 10,000 Midwestern U.S. homes throughout the winter.
• Burning 16,000 fewer tons of coal in our powerhouses.

Delphi is being recognized for these efforts. For example, the British government recognized Delphi Diesel Systems' plant in Sudbury for significantly reducing energy usage. This resulted in a reduction in the site's carbon emissions.

Looking ahead, Delphi has established goals to further reduce energy usage at our plants around the world. Delphi has an active energy management program that provides a structured process to identify energy saving opportunities that result in reduction of our global energy consumption. This process is integrated into global operations through regional energy workshops. Where appropriate, Delphi evaluates opportunities to purchase and use renewable energy such as hydro power.

We will continuously assess the impact on the environment of our plants and products, with a goal of continuous improvement.