Delphi must reach GM resolution by April 17

Monday, April 6, 2009

Delphi must reach GM resolution by April 17

David Shepardson / Detroit News Washington Bureau

Delphi Corp. faces a new April 17 government deadline to resolve its outstanding issues with its former parent company, General Motors Corp.

The Troy-based auto supplier disclosed in a regulatory filing late Friday that it is required to complete a detailed term sheet that’s been approved by the U.S. Treasury and GM in two weeks.

If Delphi fails to meet the deadline, it would be forced to repay its loans by April 25.

GM has allocated $11 billion toward Delphi’s emergence from bankruptcy and spent years negotiating a resolution of all outstanding issues with its former parts unit that it spun off in 1999.

GM, Delphi and members of the Obama administration’s auto task force are scheduled to meet today at the Treasury Department in Washington.

The Obama administration last week gave GM 60 days to develop a new viability plan and win tougher concessions from its bondholders and unions, among others. The White House also forced out GM Chairman and CEO Rick Wagoner and pledged unspecified short-term aid.

Last week, a federal bankruptcy judge delayed approval of GM’s purchase of Delphi’s steering business at the request of the Treasury Department — which has veto power over any GM transaction of $100 million or more under the terms of its $13.4 billion in loans to the automaker.

Delphi has been trying to sell its steering business since March 2006. Delphi projects its steering business will burn through $72 million in cash through the second quarter of 2009. If it can close the sale by April 30, the company could save $50 million during the second quarter, court records show.

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