Report: GM in talks to take back part of Delphi

Report: GM in talks to take back part of Delphi

Automotive News | February 9, 2009 – 6:00 am EST

 

(Reuters) — 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.

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, the paper said.

GM is also expected to pursue the closure of more auto assembly plants beyond the nine shutdowns it has already announced, the paper said, citing people familiar with the matter.

GM and Delphi could not be immediately reached for comment.

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 re-emergence last April.

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