For the first time in a very long while, you might say that Delphi is ahead of the curve. At a time when a number of automotive suppliers are finding life tough enough to file for Chapter 11 bankruptcy, Delphi is finally emerging from its own four-year-old filing.
Delphi has reached an agreement to sell off its brake and suspension business. A consortium consisting of Tempo Group, Capital Iron & Steel Co. and the Beijing government will own Beijing West Industries Co. Ltd, a new company that will buy the remaining chassis and brake operations of Delphi. Almost all of Delphi's brake business has been with GM, but many of those contracts have been re-sourced over the last several years while the company has been under chapter 11 bankruptcy. Recently, th
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.
Bankrupt supplier Delphi was expected to finalize a financing package this morning that would finally allow the company to emerge from the red, but in the 11th hour one of its investors backed out leaving the supplier, its largest customer General Motors and the company's shareholders in the lurch. Appaloosa Management LP had lead a $2.55 billion equity plan that was a large part of Delphi's financing package, and without which, the supplier will have to remain in its technically bankrupt state
The U.S. bankruptcy court hearing on Delphi's request to tear up its labor contracts has now been postponed until September 18, to allow further negotiation between the bankrupt parts maker, its labor unions and its biggest customer (and former parent company) General Motors.
The consensus seems to be that Delphi's decision to once again push back its deadline for a motion to cancel the union contract was a healthy sign. The funny thing is, no one seems to be willing to give any solid reasons that convince us to feel the same way.