More bad news

More bad news

Delphi Corp., still battling to emerge from bankruptcy, is one month from a deadline for transferring $1.5 billion in pension obligations to its former parent company, General Motors.

This is a deal that has to get done, as difficult as it might be for General Motors at this time.

Delphi remains a company with impressive technological credentials. It continues to develop and market sophisticated fuel cells, anti-pollution technologies and computerized ride-stabilization systems — and those are just some of the high points of the company’s automotive business. It has diversified into nonautomotive markets such as consumer electronics and medical systems.

The Valley did its part

Delphi’s problems are a particularly bitter pill for Mahoning Valley residents to swallow. The Packard Electric Division of General Motors, which is now Delphi Packard, was ahead of its time in recognizing the demands of competing in a world market. Thousands of production jobs in Trumbull and Mahoning counties were eliminated as Packard Electric transformed itself and remained a profitable operation, even as some other GM divisions faltered.

In those days, General Motors reaped the benefits of Packard’s success. Now it must bear some of the burden, though it may be ill-equipped to do so.

If the U.S. Pension Benefit Guaranty Corp. steps in and assumes the pension liabilities of Packard, it will have a claim on the corporation’s assets. That would be a bad deal for the PBGC (and U.S. taxpayers), for Delphi and for General Motors.