If you thought things were looking bleak at General Motors, perhaps you should take a peek at Delphi, the parts supplier that spun off from The General in 1997. It declared bankruptcy in 2005 after the revelation that its poor financial position was being masked by irregular accounting practices. Delphi has yet to emerge from bankruptcy and now says that its value has fallen to the point where it may be unable to pay back the debts it has amassed since filing for Chapter 11.

Sounds pretty bad, no? It gets worse. The supplier has filed paperwork with the court asking for permission to end health care benefits for retirees that had been salaried employees. This move could be made as early as April, after which current Delphi employees would no longer be eligible for health care benefits after retiring. If approved, Delphi says this move would save $70 million per year and free up over a billion dollars in liabilities.

[Source: Detroit Free Press]