Delphi Helps Crash GM

The general thrust of the General Motors Death Watch series—the American automaker is headed for bankruptcy—has been proven right. In all but the technical sense, GM is already bankrupt. It depends entirely on $19.8 billion worth of federal life support (a.k.a. “loans”) to survive. Until June 1. At which point the re-constituted American Leyland will need more federal “investment.” Same again? Sure! More to the point, it’s been over a year since I’ve seen a comment promising “See you at Death Watch 2345!” But I’ve made a lot of mistakes along the way. I was sure that bankrupt former GM parts supplier Delphi would be the final straw. Somehow, the zombie parts maker has kept sufficient distance from the former mothership to avoid delivering the killer blow (which Wagoner may have been snorting). Uh-oh, here’s comes another bullet! And here comes the Presidential Task Force on Automobiles (PTFOA), ’cause Uncle Sam’s favorite automaker can’t spend over $100 million without Steve Rattner’s say so.

Delphi Corp. is likely to miss a deadline today to submit to the U.S. Treasury Department an outline of General Motors Corp.’s role in the auto supplier’s plan to emerge from bankruptcy.

Delphi, GM and the Obama administration’s auto task force held an urgent round of talks Thursday in Washington and will meet again today, but officials said the discussions are likely to continue into next week. . .

GM has allocated $11 billion toward Delphi’s emergence from bankruptcy and spent years negotiating a resolution of all outstanding issues with the supplier, which GM spun off in 1999.

The Detroit News doesn’t provide much analysis of this delay, but you could file this story under “we can’t be bothered with this shit right now.” I mean, $11 billion? Delphi can get in line with all the other creditors who will “feast” on “bad GM” when the PTFOA pulls the plug on The General’s life support v1.

Or you could put this one as “there’s a bad moon rising.” Although the PTFOA’s spinmeisters talk about a quick bankruptcy, it’s clear that a lot of people are going to get a right royal shafting. And they’re not going to take it without fighting for their future against a company that includes them out.

Delphi has been taking drastic actions to cut costs.

Last month, it ended life insurance and health insurance for salaried retirees, saving $70 million a year and it warned that its current shareholders are likely to get nothing.

Earlier this month, a federal bankruptcy judge delayed approval of GM’s purchase of Delphi’s steering business at the request of the Treasury Department.