Business NEWS
GM and Delphi talks; GM May Take Back Part of Delphi!
By Amarendra Bhushan for CEOWORLD Magazine Updated:February 9, 2009
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General Motors Corp is in talks to take back large portions of Delphi Corp , the parts supplier spun off by the auto maker a decade ago, the Wall Street Journal said, citing people involved in the negotiations.
- General Motors Corp is in talks to take back large portions of Delphi Corp, the parts supplier spun off by the auto maker a decade ago.
- The discussions are part of GM’s strategy to line up additional bailout funds from the U.S. government, which has already committed $13.4 billion to the car company.
- GM is also expected to pursue the closure of more auto assembly plants beyond the nine shutdowns.
- GM has taken more than $11 billion in charges for Delphi’s reorganization.
- GM agreed when it spun Delphi off in 1999 to assume pension and healthcare obligations for thousands of union workers should the supplier be unable to do so.
- Delphi has been trying to complete a revised reorganization plan since investors led by Appaloosa Management backed out of a $2.55 billion equity plan to support its reemergence last April.
The WSJ reported that the automaker’s move is part of its strategy to win additional bailout funds from the U.S. government, which has already committed $13.4 billion to the car company. The Troy, Michigan-based Delphi has been under bankruptcy protection for 40 months. It has also been a cash drain on GM due to subsidized operations under obligations stemmed from the creation of Delphi.
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