Report: GM and Delphi close to deal that would avert UAW strike

According to Bloomberg, sources within the ongoing negotiations between General Motors and Delphi are saying that an agreement is near. The article cites a half dozen unnamed individuals who are confirming that GM will subsidize the pay of Delphi's workforce to ensure that a strike within the parts supplier doesn't cripple GM production.
Since Delphi and the General are inextricably linked, with Delphi providing the parts and GM serving as Delphi's largest customer, it's in the interest of both parties to keep production rolling along unabated. If Delphi workers would strike, some analysts contend that GM's plants would shut down within two days. Rick Wagoner recognizes the potential for catastrophe and has admitted to doing everything in his power to avoid such a scenario.

In addition to subsidizing the salaries of Delphi workers, GM is expected to agree to long-term supply contracts that will ensure the parts supplier's future, which flies in the face somewhat of news we heard a few days ago that Delphi and GM were both seeking to drop as many unprofitable contracts with each other as possible. The $12 billion that GM is paying towards the retirement costs of ex-Delphi employees is expected to remain unchanged.

Overall, the juggling of high-stakes creditors, union jobs and internal strife, along with keeping production lines open, is keeping GM execs working at full tilt. Hopefully, it seems as though resolution on the supply end of things is beginning to move forward and not a moment too soon.

[Source: Bloomberg]

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