By on September 29, 2009

Oracular spectacular (courtesy:the internet movie car database)

Chinese T-bill buyers may have provided the capital for GM’s bailout (and by extension, GM’s bailout of Delphi) but American taxpayers will have to pay them back eventually. Meanwhile, the Chinese government gets to yea-or-nay GM’s rescue of its spun-off supplier. And the yeas have it. Automotive News [sub] reports that GM will assume more than $1b worth of Delphi’s debt, while waiving $2b in claims against its largest supplier. Additionally, GM will invest $1.75b in Delphi and provide an unspecified amount of new debt. China’s only concern was that Delphi set up firewalls between GM and its other Chinese clients in order to protect the intellectual property of Chinese firms. With that measure taken, and Chinese approval secured, Delphi appears on track to end its four year sojourn in bankruptcy by month’s end. Can GM afford this kind of outlay to keep Delphi alive? Shouldn’t Delphi have been given its own separate bailout to keep costs transparent? No matter, it’s fait accompli at this point. At least the Chinese government was kind enough to approve the deal (oh, and back its financing in the first place).

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9 Comments on “Delphi Stealth Bailout Approved By China...”


  • avatar
    rnc

    Isn’t GM just buying the Steering division (like 4 plants) while the remainder of Delphi remains independent? One of the biggest problems that Delphi had is that all of the unprofitable plants that it wanted (needed) to close in BK, all manufactured parts that GM had to have to survive, and b/c of contractual obligations related to the spinoff Delphi (UAW/Pension) couldn’t get rid of them and GM couldn’t afford to bring them back in (until now).

  • avatar
    ChristyGarwood

    IMO, the GM-Delphi-UAW web is woven tightly with labyrinthian zeal.

    @rnc – great summary – the AN article confirms you are correct about the 4 plants and is consistent with GM employee info I get. I am not so sure about your last statement though about what GM could afford when. With Delphi in BK since 2005, and GMAC (now Ally Bank) bailed out Dec. 2008 with TARP funds, and old GM BK proceedings July 20009, only the master weavers (Neel Kashkari? Rattner? Bloom?) could say.

  • avatar

    This car is a dead ringer for the F-117 Stealth fighter.

    http://bobshermanspage.com/F-117.jpg

  • avatar
    panzerfaust

    That’s a better looking Stealth car than the last one you showed, rusting in pieces in Pearsonville CA. Those side mount headlamps prolly don’t do much for the radar signature.

    As for the article; when we say “Government Motors” it’s beginning to beg the question ‘which government?’

  • avatar
    ChristyGarwood

    @panzerfaust

    From what I recall, USA, Canada, Sweden, Germany and possibly Korea and Australia have all contributed in some way to GM. China contributed by providing a rebate program for new cars as well as being the backers of the US T-bills for TARP and Chrysler/ GM loans. It is a global economy…

    I really like the car! Is it just me or does it look like a Corvette if you take the top off?

  • avatar
    mpresley

    Let’s face it…the Chinese own us. The US economy is bankrupt, and it’s only our naive and/or delusional thinking that tells us otherwise. Oh well, at least the Chinese women sort of like us, so we’ve got that going for us. But it could change quickly once we as a nation are no longer are a good investment.

  • avatar
    gslippy

    “Protecting the intellectual property of Chinese firms” is a statement fraught with irony.

  • avatar
    vento97

    This is a spyshot of the upcoming 2010 plug-in hybrid Batmobile…

  • avatar
    panzerfaust

    ChristyGarwood; ‘contributed to GM’ ? TARP was a contribution?

    It is just you.


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