GM Is Said to Be in Talks Over Reacquiring Four Delphi Plants
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By Doron Levin
Feb. 10 (Bloomberg) -- General Motors Corp. and Delphi Corp., its bankrupt former auto-parts division, are negotiating the return to GM of four Delphi plants essential to most of GMís North America production, a person familiar with the talks said.
The four Delphi plants are in Kokomo, Indiana; Rochester, N.Y.; Lockport, N.Y. and in Wyoming, Michigan, near Grand Rapids, the person said. Each is represented by the United Auto Workers union.
GM, restructuring while it operates with $13.4 billion in U.S. loans, is trying to assure a reliable supply of parts to its North American final-assembly plants, the person said. A sale may help Delphi stabilize its finances and emerge from bankruptcy after filing in October 2005.
Delphiís U.S. operations have been losing money as GM and other automakers scale back production in response to plummeting demand for new vehicles. Delphi posted a $5.2 billion profit in the third quarter after transferring UAW pension liabilities to Detroit-based GM.
Delphi, based in Troy, Michigan, said last week that a falloff in the value of its business may render the company unable to pay off debtor-in-possession bankruptcy loans. GM has agreed to advance the partsmaker as much as $100 million by monthís end to keep Delphi running through late April.
Delphi and its creditors have asked for $2 billion for the plants, while GM is attempting to pay little or nothing, according to a Wall Street Journal report yesterday. Lindsey Williams, a Delphi spokesman, declined to discuss the talks.
Reorganization Plan
In an e-mailed statement, GM spokeswoman Renee Rashid-Merem said, ìGM is continuing to work with Delphi and its debtor-in- possession lenders as Delphi pursues emergence from bankruptcy.î
Under the terms of a restructuring agreement between GM and Delphi, GM may take back certain unsold Delphi businesses, she said, ìhowever we wonít comment on whether GM is considering that option for any Delphi sites.î
Delphi is scheduled to file a reorganization plan by Feb. 27 that will set payouts to creditors and explain how the company will earn a profit outside of bankruptcy.
A GM attempt to take back Delphi factories would be similar to a move by Ford Motor Co., to prevent the collapse of Visteon Corp., its former parts unit. Ford assumed ownership of 23 factories and offices in October 2005, selling or closing most.
The case is In re Delphi Corp., 05-44481, U.S. Bankruptcy Court, Southern District New York (Manhattan).
To contact the reporter on this story: Doron Levin in Southfield, Michigan at
dlevin5@bloomberg.net Last Updated: February 10, 2009 20:58 EST
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