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task force continue in hopes of reaching a deal on a plan to lift the auto
supplier out of bankruptcy protection before a crucial deadline passes.
Delphi Attorney Jack Butler said today that the talks, which also include
Corp., will continue through the Memorial Day weekend. In addition, separate
mediation sessions between the parties are taking place in front of U.S. Judge
Cecila Morris.
Troy, Mich.-based Delphi is
second-largest employer, with more than 3,000 workers.
In his order filed yesterday, U.S. Judge Robert Drain said that while he’s
satisfied that
involved are negotiating in “good faith,” the mediation process may
help them reach an agreement before the Troy, Mich.-based supplier’s
court-imposed June 2 deadline.
In the interim,
courtroom on May 29.
“It’s our anticipation that there will be amendments to our proposals
filed next week and we would expect to be able to provide more information to
the court as far as our next steps at that time,”
Meanwhile, Detroit-based GM faces its own
June 1 deadline to cut its debt, reduce labor costs and take other
restructuring steps. If it doesn’t meet the deadline, the automaker’s chief
executive has said it will file for bankruptcy protection.
GM has committed to supplying
since the supplier filed bankruptcy protection in 2005, in order to assure a
steady supply of the parts GM needs to produce its vehicles.
But the auto task force, which now has
oversight over GM’s major financial deals, has balked at spending more without
a clear-cut plan showing how the money would be used.
Industry observers have speculated the
fails to get the financing it needs from GM.
Delphi has sold businesses that it has deemed
“noncore” in an attempt to cut costs and raise the funding it needs
to emerge from court protection. But the auto industry’s troubles and tight
credit markets have made it tough for the supplier to find adequate financing
and forced it to increasingly rely on its former parent.
Earlier this year, Delphi attempted to sell
its global steering business back to GM, as part of a deal where GM would
increase its credit commitments to
$150 million, to a total of $450 million. But the proposed sale was vetoed by
the task force, which must approve these kinds of deals under the terms of GM’s
current federal aid.
Both the proposed sale and the increase in
credit commitments are scheduled to be discussed at
May 29 hearing.
Also at today’s hearing, Drain gave final
approval to the sale of Delphi’s brakes and ride dynamics business to
of $90 million, of which
operating under bankruptcy protection will receive $30 million. The sale is
expected to close by the end of the year.
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