GM gives Delphi a break

According to Reuters, GM has agreed to provide short-term financial support to Delphi by temporarily giving up previously negotiated price reductions on auto parts for 2006.

In what appears to be a quid pro quo, Delphi announced that it would delay its plans to ask the bankruptcy court to summarily reject its labor contracts, reducing the danger of a strike that would cripple GM.

GM sourced more than $15 billion in components from Delphi in 2004.

Delphi previously threatened to file motions to reject its labor contracts by December 16, if agreements with the unions had not been reached.