When Delphi announced its plans for restructuring "transforming" the bankrupt company, the details were somewhat lost in the cloud of dust raised by its request for the bankruptcy court to void its union labor contracts and free the company to bring its labor costs to what it sees as a competitive level (read, much lower). However, a key element of the Delphi restructuring plan is focusing on its "core strategic product lines" while selling off its non-core product lines and plants.

This sort of thing sounds good to analysts and creditors, but as the saying goes, the devil is in the details. Specifically, are there any eager buyers for Delphi's businesses in the areas of Brake & Chassis Systems, Catalysts, Cockpits and Instrument Panels, Door Modules and Latches, Ride Dynamics, Steering and Wheel Bearings?

[Continued after the jump] With its American counterparts in the same financial boat as Delphi, buyers are likely to come from overseas. Unfortunately, according to Reuters' Frankfurt bureau, early reactions from Europe are, um, unenthusiastic.

One issue is the overcapacity in the U.S. auto parts market, given the falling production at Detroit automakers. Germany's ThyssenKrupp, for example, is already finding its own U.S. parts-making operations in trouble because of falling demand from Detroit.

Another issue is the expense of running U.S. factories, at a time when diversification makes more sense into countries where business costs are lower and domestic markets are booming, like China. Continental AG is considering shuttering its organized-labor-staffed U.S. tire business, and has said it is not looking to acquire any heavily unionized U.S. business (probably because it has its fill of labor problems in Germany).

No word from the Asian markets, yet. However, if the example of MG Rover is anything to go by, the fate of some of Delphi's "non-core" operations could be simply a sale of the intellectual property and product tooling, to be shipped overseas.

[Sources: Delphi, Reuters]

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