By Robert Farago
August 15, 2008 -
![By now, Delphi had lost much of its importance (and wealth). It still existed as a cultural and religious center, but never regained its political power again, although it remained important as a center of \"creating Greekness\". For example, Roman politicians who wanted to show that they were civilized people, sacrificed in Delphi - if only to win political support in the Greek world. (text and pic courtesy livius.org)](http://www.thetruthaboutcars.com/wp-content/uploads/2008/08/delphi_tr_athens12.jpg "By now, Delphi had lost much of its importance (and wealth). It still existed as a cultural and religious center, but never regained its political power again, although it remained important as a center of \\"creating Greekness\\". For example, Roman politicians who wanted to show that they were civilized people, sacrificed in Delphi - if only to win political support in the Greek world. (text and pic courtesy livius.org)")
Once again, former GM division and bankrupt parts supplier Delphi is proving to be the thorn in GM's side that could well prove to be a lance through its heart. Or something like that. Anyway, Automotive News [sub] reports that the feds are taking steps to sort out Delphi's pension liabilities, and The General could end up with one big ass bill. "In a letter to GM and Delphi, the federal Pension Benefit Guaranty Corp. warned it would lay claim to $8 billion if the automaker does not keep its pension plans intact, the [New York Times] paper said. This would dilute the claims of Delphi's other unsecured creditors, who are owed about $3.5 billion." To forestall that possibly mortal blow, "The U.S. government has asked bankrupt auto parts maker Delphi Corp. to transfer more than $1.5 billion of unfunded pension obligations to former parent General Motors by September 30." Whew! And here I thought we were talking about real money.
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POWERED
August 15th, 2008 at 10:49 am
Um this is why I prefer the 401k.
August 15th, 2008 at 11:03 am
Delphi is consistently eating away at the cash pile GM is burning through. I hope they have a money tree or found the city of gold because the money isn’t going to last forever.
How long can this bankruptcy last don’t they have a deadline to get out of bankruptcy?
I thought there was a GM Death Watch coming?
August 15th, 2008 at 11:07 am
The Fed has a money tree and we are growing dollars as fast as we can (at least in the past 7 years - no other time have we printed so much new money). GM doesn’t have a money tree anymore as it was hit by a big ole SUV - but they have Ricky Bobby running the show and entertaining us with their brilliant quips and gaffes.
August 15th, 2008 at 11:35 am
Ahhhh, whoops. Wasn’t the figure “money left over in GM coffers” only some $11.5 billion last time we checked? Or am I dreaming?
$1.5 billion out of that leaves GM in the situation of not having sufficient monies to come out of their own Chapter 11.
$8 billion out of that $11.5 billion would mean immediate Chapter 7 for GM.
Hence the gummint “only” pushing for the one point five, as a guess.
As for the Fed money tree, jaje, you’re right on the money (ha ha I made a money punny). Sorry, it’s actually not a laughing matter. Or, soon won’t be.
As of right now, the powers that be are busy selling off all the last gold in Ft Knox, trying to push the value of AU (gold) down (and build up the US dollar).
Unfortunately, it may well prove to be a dead-cat bounce for the dollar - after which we’ll find that Ft Knox is empty and we’re all screwed. Just my guess.
August 15th, 2008 at 11:37 am
menno :
It’s not $1.5b or $8b cash. It’s a liability.
August 15th, 2008 at 11:54 am
But keeping things simple, isn’t that (a liability vs. cash) the same thing as saying “you have to have…” or “you have to set aside….” or “you owe…”?
I’m no high-flying money-brainiac. I do know that if I suddenly had my bank turn around and tell me that I now owed (let’s say) 60% more on my house than I did 2 minutes prior, and that the length of my mortgage would increase and the payments would also increase, I’d be in a world of hurt.
So why is this different for General Messup?
August 15th, 2008 at 12:34 pm
The Oracle did not forsee this?
I forsee that there are millionaires that will be just fine, and workers that are going to be screwed.
Lucky for me that my 401k will protect me from bad business practices, greedy speculation and government taxation, so I’ll be able to retire “worry-free”.
OH WAI
August 16th, 2008 at 9:43 am
Cue the music from “Jaws”…..
August 16th, 2008 at 1:52 pm
Delphi is losing a fortune; Chapter 7 is a real possibility by the 4th quarter this year. Their pension bill be GM’s full responsibility by early ‘09. What a mess!
August 16th, 2008 at 3:39 pm
The millionaires who made a bunch working for or with these companies will be fine.
The workers will be fine.
The folks that pay the majority of taxes in this country (many are millionaires, most never will be due to the insane taxes on their most productive working years) are the ones who will get screwed. They will get this screwing from the above mentioned folks who will possibly lose a small part of their ill gotten gains.
I don’t see even the feds being so stupid as to force GM into bankfuptcy this way. That will make the hit even bigger for the PBGC because last I heard, GM still had not fully funded their own benefits deal with the thugs and thieves.