GM to get stuck with big bills in Delphi bankruptcy

It seems somehow appropriate that GM will end up with nearly $11B
in pension liabilities as Delphi declares bankruptcy, seeing as how the 1999 spin-off in hindsight now looks to be
doomed from its very beginnings. Forcing Delphi to take on nearly 50,000 UAW workers freed GM of those worker’s
obligations on its balance sheet, making things look ever so slightly better (GM still ended up
borrowing nearly $20B in 2003 to cover
obligations relating to its remaining workforce). But if GM, with nearly $200B/year in annual sales couldn’t cover the
obligations to those workers, why would it be possible for an enterprise 1/10th the size to do any better? The fact
that there’s a 2007 deadline for GM’s exposure to any risk in a Delphi bankruptcy indicates that, six years ago, it was
probably thought that things could coast along past that cut-off. So, now the next big question looms – what will this
do to GM’s precarious financial situation? That will play itself out in the upcoming months, I suspect.

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