DELPHI CORP ! Ein Riese erwacht!

Talks have been continuing among Delphi and its lenders, G.M. and the auto task force, and meetings are scheduled for Thursday and Friday. But little consensus has emerged, said people with knowledge of the talks, who spoke on the condition that they not be named because the talks were fluid.

A liquidation would represent a dismal end. Except for 2002, Delphi has reported a net operating loss every year since it was spun off. Since it filed for bankruptcy, it has been kept alive largely through $11 billion in support payments from G.M.

Even though Delphi has shuttered domestic factories and shed thousands of unionized workers, it faces continuing pension obligations, some of which have already been transferred to G.M.; a drastic downturn in car sales; and the battered credit markets, making financing for its operations difficult to obtain.

Based in Troy, Mich., Delphi had about 148,000 employees as of Dec. 31. In its annual report, filed last month, Delphi disclosed a $1.48 billion operating loss for 2008.

“Our focus remains on change, and we continue to focus our efforts on restructuring within our Chapter 11 case,” said Lindsey Williams, a Delphi spokesman.

Representatives for JPMorgan Chase and Citigroup, Delphi’s chief lenders, declined to comment.

The news from Delphi in recent days has been largely gloomy. In an interview with The Wall Street Journal on Tuesday, Kent Kresa, G.M.’s new chairman, raised the specter of a Delphi liquidation.

On Monday, Delphi requested that the judge in its bankruptcy case disband its equity holders’ committee, a cost-cutting move that also indicates how poor the expected recovery rates for its stakeholders are.

The Obama task force has largely been consumed with finding reorganization solutions for G.M. and Chrysler. But the universe of auto parts makers, ranging from giants like Delphi to tiny suppliers, is equally troubled and just as starved for cash.

G.M., Chrysler and Ford Motor together buy about $5 billion in parts a month, the Motor and Equipment Manufacturers Association, a trade group representing hundreds of suppliers, says.

For years, Delphi has produced a variety of parts for G.M. cars, like steering components, heating systems and electronics. While G.M. has diversified its supply base to a degree in recent years, it still largely needs what Delphi produces.

“Given the amount of components it sources from Delphi, it’s not likely that G.M. would be able to re-source to other companies in a timely fashion,” said Jim Gillette, an analyst with CSM Worldwide, an auto research firm.

This year, G.M. planned to take back several assets from Delphi, including factories and its steering business. The proposal was similar to what Ford had done with Visteon, its former parts supplier.

Since G.M. took $13.4 billion in federal aid, however, the Obama task force has exerted greater control over the carmaker’s support of Delphi.

This month, lawyers for the administration persuaded Delphi’s bankruptcy court judge to delay G.M.’s purchase of its steering business, a transaction G.M. undertook because a previous deal with another buyer fell apart. Through its loan, the government gained the ability to reject G.M. transactions larger than $100 million.

The auto task force has said that it will allow G.M. to help pay for Delphi’s survival only in conjunction with a broader reorganization plan.

It is not the first time that a rescue for Delphi has collapsed at the last minute. In March 2008, a group of investors led by Appaloosa Management backed out of a deal to invest $2.55 billion in the supplier. That scuttled a $6.1 billion financing package meant to pay for Delphi’s exit from bankruptcy.

As that deal fell apart, so too did the credit markets, making so-called debtor-in-possession financing largely unavailable and extremely expensive when offered.

Judge allows Delphi to narrow suit vs. hedge fund
Judge permits Delphi to drop some claims in lawsuit against Appaloosa hedge fund
Vinnee Tong, AP Business Writer
Friday April 17, 2009, 12:44 pm EDT
      Buzz up! Print Related:Delphi Corp., General Motors Corporation
NEW YORK (AP) -- A bankruptcy court judge said Friday that auto parts supplier Delphi can remove fraud claims while pushing ahead with others in its lawsuit against the hedge fund Appaloosa Management LP.

Related Quotes
Symbol Price Change
DPHIQ.PK 0.0560 -0.0030

GM 1.86 -0.08


{"s" : "dphiq.pk,gm","k" : "c10,l10,p20,t10","o" : "","j" : ""} U.S. Bankruptcy Judge Robert Drain ruled in favor of Troy, Mich.-based Delphi Corp., which once was a subsidiary of General Motors Corp. and remains a big supplier to GM.

Appaloosa is expected to seek dismissal of all or part of the case in an effort to avoid trial.

In court, Drain agreed with Delphi that the hedge fund's objection to altering the lawsuit amounted to no more than "a press release." He said it was either "largely irrelevant or entirely irrelevant" to the case.

An earlier schedule had the trial set to start in mid-June, but a lawyer for Appaloosa told the judge that it might need more time to prepare.

Appaloosa, run by Goldman Sachs alum David Tepper, had led a group of investors in 2007 that agreed to inject as much as $2.55 billion into Delphi in exchange for stock. Investors withdrew from the deal in April 2008 and Delphi sued.

Delphi says the Appaloosa group urged lenders to withdraw commitments for $6.1 billion in financing it needed to exit bankruptcy. Delphi argues that Appaloosa and Tepper were liable for what other members of the group may have done to discourage lenders.

The auto supplier has been operating under court protection since October 2005

Judge grants Delphi extensionBusiness First of Buffalo - by Thomas Hartley
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muss der restrukturierungsplan vorliegen....

Delphi Corp. won approval Thursday in bankruptcy court of its motion for more time to submit a restructuring plan.

Without bankruptcy Judge Robert Drain’s okay, the struggling parent of Delphi Thermal Systems in Lockport, which has 2,100 employees, might have been forced into liquidation.

The former deadline passed on April 17.

Troy, Mich.-based Delphi, which now has until May 4 to submit its plan to lenders, has been operating under Chapter 11 bankruptcy protection since October 2005.

Lenders will have until May 8 to approve it. A court hearing is set for May 7.

Corporate spokesman Lindsey Williams said Delphi continues to hold discussions with lenders, former parent General Motors Corp., and the U.S. Treasury to reach an agreement.

“We have worked with our (debtor-in-possession) lenders to secure sufficient liquidity to continue to operate our U.S. sites during this current period of low production volumes,” Williams said.

The equity committee attorneys said in court documents that Delphi has no value beyond its debtor-in-possession financing, which is funding to get it through bankruptcy. They argued the committee should remain to pursue claims against GM.

'At this time, it appears clear that the debtor will under any scenario not be able to make a distribution to its pre-petition shareholders,' said Judge Robert Drain of U.S. Bankruptcy Court for the Southern District of New York.

The judge also approved bidding procedures for the sale of Delphi's brakes business, which Delphi agreed to sell to BeijingWest Industries Inc of China for $90 million, pending court approval.

The case is In re: Delphi Corp et al, U.S. Bankruptcy Court, Southern District of New York, No. 05-44481.

(Editing by Tim Dobbyn) Keywords: DELPHI/

(thomas.hals@thomsonreuters.com, 1-646-223-6356; Reuters Messaging thomas.hals.reuters.com@reuters.net)


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But in announcing plans to temporarily close 13 assembly plants in the U.S. and Mexico -- some for more than two months -- GM said it had proposed a solution that would resolve Delphi's bankruptcy case, only to have it be rejected by the supplier's lenders.

"Without the successful resolution of this dispute, it is General Motors' view that Delphi or its lenders could force GM into an uncontrolled shutdown, with severe negative consequences for the U.S. automotive industry," GM said in its statement.

Delphi released a statement late Thursday saying that it would be "counterproductive" to comment on the restructuring efforts of GM or itself.

"Each of the parties have provided proposals for a potential solution that each believed would allow for the successful and rapid resolution of Delphi's Chapter 11 cases," Delphi said in its statement. "We remain confident that continuing to aggressively work with all of the stakeholders will result in a satisfactory resolution of these issues."

Detroit-based GM has committed to supplying Delphi with hundreds of millions of dollars in funding since the supplier filed for Chapter 11 bankruptcy protection in 2005, in order to assure a steady supply of the parts GM needs to produce its vehicles.

But the Treasury Department's automotive task force, which now has oversight over GM's major financial deals, has balked at spending more without a clear-cut plan showing how the money would be used.

Industry observers have speculated the Delphi could ultimately be forced to shut down if it fails to get the financing it needs from GM.

Butler declined to comment on the possibility that Delphi could liquidate. But he noted that the term sheet deadlines have been pushed back before and that all sides involved in the case -- including the company's lenders -- remain focused on helping Delphi emerge from bankruptcy protection.

"We want to complete our work as soon as we can, but we need to come to an agreement that works for everyone," Butler said.

Meanwhile, GM's future also remains in doubt. It's living on $13.4 billion in government loans and faces a June 1 deadline to cut its debt, reduce labor costs and take other restructuring steps. If it doesn't meet the deadline, the automaker's CEO has said it will file for bankruptcy protection.

Both Delphi and GM have cut thousands of jobs and shuttered plants over the last several months in hopes of riding out one of the worst U.S. vehicle sales declines in more than 25 years.

Delphi has sold off businesses that it has deemed "noncore" in an attempt to cut costs and raise the funding it needs to emerge from court protection.

But the auto industry's troubles and tighter credit have made it tougher for the supplier to find the financing it needs. It has had to rely on GM, which still needs Delphi to supply parts for many of its models.

Earlier this year, Delphi attempted to sell its global steering business back to GM, as part of a deal where GM would increase its credit commitments to Delphi by $150 million to a total of $450 million. But the proposed sale met with resistance from the task force, which must approve these kinds of transactions under the terms of GM's current federal aid.

Both the sale and the increase in credit commitments scheduled to be discussed at Delphi's May 7 hearing.

Also at Thursday's hearing, Drain approved a Delphi motion to disband its shareholder's committee, saying that given the current industry environment, the shareholders will not be able to recoup any of their investments.

"Unfortunately while the debtor has been able to transform itself, the transformation of the industry has gone in a different direction," Drain said. "At this point, it appears that the debtor under any circumstance will not be able to make any distribution to its shareholders."

Nach den letzten Chrysler-Plänen soll die Autogewerkschaft UAW künftig Mehrheitseigner sein. Für einen Schuldenverzicht bekäme sie 55 Prozent am Unternehmen. Fiat soll 20 bis 35 Prozent erhalten, den Rest der Staat. Fiat will für den Einstieg nichts bezahlen, sondern spritsparende Technologie und Kleinwagen einbringen.

Obama sprach sich am Mittwoch erneut grundsätzlich für die Rettung der US-Autoindustrie aus. Bisher seien die Sanierungskonzepte von Chrysler und der Opel-Mutter General Motors (GM) aber nicht überzeugend gewesen. GM hat von Obama für einen finalen Rettungsplan einen Monat länger bis Ende Mai Zeit bekommen.

Ein Sprecher Obamas hatte sich zuvor zuversichtlich gezeigt, dass es "einen Weg zu Chryslers Überlebensfähigkeit ohne andauernde (Finanz)hilfe der Regierung" gebe. Der Staat hat Chrysler bei einem tragfähigen Konzept weitere sechs Milliarden Dollar in Aussicht gestellt über bereits geleistete vier Milliarden Dollar hinaus.

Das US-Finanzministerium hatte unterdessen die vorläufige Einigung über einen Schuldenverzicht zumindest mit einem Teil der Gläubiger bestätigt. Die Kreditgeber streichen danach für eine Abschlagszahlung von zwei Milliarden Dollar in bar ihre Gesamtforderungen von fast sieben Milliarden Dollar (5,3 Mrd Euro).

Chrysler mache bei seiner Sanierung bereits Fortschritte , so Chrysler-Chef Robert Nardelli in einem der Deutschen Presse-Agentur dpa vorliegenden Mitarbeiterschreiben. Im ersten Quartal seien die Kosten im Vergleich zum Vorjahr und auch zum Schlussquartal 2008 deutlich gesunken./fb/fd/bb/DP/zb