Delphi creditors look to void supply contracts with GM

Adding another layer to the Delphi drama this week, the company's creditors went to court asking that the company be allowed to cancel its established supply contracts with GM, supporting Delphi's request from March. GM responded to the original filing by calling the move "blackmail", and stated that if allowed, the action could cost GM up to $1B each month. The creditors claim that the legacy costs inherited from GM are what drove Delphi to bankruptcy, and therefore the automaker should be paying more for the parts as a restitution of sorts. A hearing on this topic is scheduled for August 15.

On the labor front, the recently-expanded worker buyouts have been received fairly well, with 8500 Delphi workers taking advantage of the offer. The UAW has stated that the parties involved in the ongoing negotiations are "not close" to an agreement on what to do with the contracts of remaining employees. Delphi is looking to cut wages to $12.50/hour if GM does not offer to subsidize the supplier's labor costs. This particular issue goes in front of the court on August 11.

[Source: AP via Yahoo!]