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Delphi working toward new GM deal

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By Thomas Gnau, Staff Writer 3:50 PM Wednesday, April 22, 2009

Delphi Corp. is working with General Motors Corp. and the U.S. Treasury on a new agreement nailing down GM’s level of support for Delphi, a company spokesman said today, April 22.

After a hedge fund, Appaloosa Management, withdrew expected support for Delphi a year ago, bankrupt Delphi has found itself relying increasingly on help from GM, its former parent and biggest customer. Meanwhile, GM itself may be approaching bankruptcy.

A deadline for an agreement with GM was last Friday, but there is a five-day “grace period” in play before lenders are expected to take any kind of action. The new deadline: This Saturday.

“Delphi, GM and the U.S. Treasury, the Automotive Task Force, continue to engage in discussions regarding the remaining elements of our restructuring, in the context of a GM restructuring,” said Lindsey Williams, a Delphi spokesman.

If the deadline isn’t reached, the prospect of liquidation looms for Delphi.

GM faces its own tough timeline for an out-of-court restructuring, with a decision on whether to seek bankruptcy protection widely expected by June. A GM spokeswoman could not be immediately reached.

Delphi has some 200 employees at its Vandalia facility. It leases part of its Kettering plant to auto parts producer Tenneco and, since seeking bankruptcy protection in 2005, has closed several plants in Moraine and Dayton.

Last month, Delphi ended health insurance and life insurance coverage for salaried retirees, saving $70 million a year.

GM spun Delphi off in April 1999. In 2008, 30 percent of Delphi’s sales were to GM.

Contact this reporter at (937) 225-2390 or tgnau@DaytonDailyNews.com.

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