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Old 04-28-2009, 02:08 PM   #1
AVANTI R5
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Default Treasury Wants Delphi Dead




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The U.S. Treasury blocked moves by General Motors Corp. to increase payments to its former parts subsidiary Delphi Corp., which has been reorganizing under Chapter 11 bankruptcy protection since 2005, and to acquire the supplier’s steering business.

In a regulatory filing that details GM’s restructuring plan, the automaker said that the Obama administration’s automotive task force — which has the authority to reject transaction of more than $100 million — did not approve a deal that would have moved Delphi’s unwanted steering business to GM.

The task force also rejected a plan to add another $150 million to GM’s funding to the supplier, which was aimed at keeping the cash-strapped company operating through May.

The rejections have resulted in what is now a shorter timetable for Delphi to resolve its bankruptcy case.

GM, the Treasury, Delphi and its lenders are in negotiations and now face a May 9 deadline to come up with a deal that will resolve Delphi’s Chapter 11 bankruptcy.

Without a deal by then, banks that are financing Delphi’s operations in bankruptcy could call their loans, resulting in the liquidation of the company.

GM warns in its filing that if Delphi can’t emerge from bankruptcy in the near-term, “it may be forced to sell all of its assets.”

If that happens, GM says it would have to foot the bill to find new suppliers and buy back Delphi’s plants to ensure the parts supply is not disrupted.

“If they’re going to run out of money, that could halt production, that could bring General Motors to its knees,” said Birmingham-based restructuring expert Van Conway.

An abrupt shutdown would almost certainly lead to a GM bankruptcy filing, one in which Delphi lenders would have little leverage, Conway said.

Meanwhile, GM sent a signal to Delphi that it would avert an abrupt production halt this summer, if Delphi failed to deliver parts, because 13 of GM’s North American plants would already be on an extended shut down.

Delphi said last week that it has had no supply disruptions in its more than three-year bankruptcy case.
http://freep.com/article/20090428/BU...M-Delphi+deals
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Old 04-28-2009, 02:49 PM   #2
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Man, it just keeps getting worse. Guess that means that if Delphi goes under, it will mean more parts from China will find its way into American cars.
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Old 04-28-2009, 05:52 PM   #3
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Originally Posted by SCRAPPYDO View Post
Man, it just keeps getting worse. Guess that means that if Delphi goes under, it will mean more parts from China will find its way into American cars.
Yeah, because just having all the components made in China and putting a couple screws in here in America makes a huge difference.

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Old 04-28-2009, 07:16 PM   #4
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Man, it just keeps getting worse. Guess that means that if Delphi goes under, it will mean more parts from China will find its way into American cars.
Uhhh... No. It actually means the solvent OEM suppliers here get to pick up the business. It is too costly and needs to happen too quickly to resource everything to China. Because of this, GM is moving to it's already existing suppliers to pick up the slack. We recently took over a HUGE piece of Delphi business after GM came to us and asked us to quote the business. This was good for us during these times...

There is A LOT of excess capacity among the American OEM suppliers right now. This means low prices and quick change over for GM.
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Old 04-28-2009, 08:05 PM   #5
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Originally Posted by SCRAPPYDO View Post
Man, it just keeps getting worse. Guess that means that if Delphi goes under, it will mean more parts from China will find its way into American cars.
Delphi has been under bankruptcy protection since 2005. It failed 4 years ago. It's dead. It's not coming back to life. It almost pulled GM down with it. It's about time someone finally unplugged the ventilator.
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Old 04-29-2009, 08:31 AM   #6
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You see, there you go, live and learn!
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