Delphi Corp. announces agreements with GM

The agreements mean Delphi can move forward in its
emergence from bankruptcy.

STAFF/WIRE REPORTS

DETROIT — Delphi Corp. announced Thursday it has signed settlement and restructuring agreements with former parent General Motors Corp., clearing a major obstacle to its emergence from bankruptcy protection.

The Troy-based auto parts supplier filed its reorganization plan with a federal bankruptcy court in New York on Thursday in its quest to end nearly two years under Chapter 11. The plan requires the court’s approval, and the company plans to leave bankruptcy protection by the end of the year.

Delphi has said it would retain its Mahoning Valley operations but at a much smaller size.

The hourly work force at Delphi Packard Electric has been cut from 3,800 to about 1,000, and its massive North River Road complex in Warren is largely vacant.

Packard had about 1,200 salaried workers when the bankruptcy started. Delphi said it wanted to cut its white-collar staff in North America by 25 percent but no numbers have been released on how many are left in the Warren area.

Resolves all issues

Delphi’s agreement with GM resolves all outstanding issues between the automaker and supplier, including a lawsuit filed by Delphi to terminate supply agreements with GM and potential claims and disputes stemming from Delphi’s spinoff as a separate company in 1999.

“This would be what I’d call a bringing it all together,” Delphi Chief Executive Rodney O’Neal said Thursday. It “signals the announcement that Delphi believes it has all of its moving parts nailed down and we have a plan that we believe will pass the test and will be confirmed by the court and various stakeholders.”

The agreement with GM follows pacts reached with all six of Delphi’s labor unions as well as a finalized deal for investors to invest as much as $2.55 billion.

In addition to the equity investment, Delphi said Thursday it’s in discussions to secure $7 billion for its bankruptcy emergence to repay financing obtained after it entered court protection, as well as other creditors.

The company said it is talking to a consortium of banks and is confident it will have commitments for the $7 billion early in the fourth quarter.