GM: "Delphi Could Force GM Into an Uncontrolled Shutdown"

Robert Farago
by Robert Farago

Ah, Delphi. I remember predicting—what, two years ago?—that parts maker Delphi’s collapse would drag GM into bankruptcy. Well, just as GM is falling into C11 on its own accord (so to speak), it seems the ghost of subdivisions past are about to . . . drag GM into bankruptcy. The Detroit News reports that GM’s sent up an emergency flare. “In light of adverse developments in the industry, at GM and at Delphi, GM has been in negotiations with Delphi and its lenders to arrive at solutions that would ensure GM’s source of supply under fair and reasonable terms,” GM said in a statement today. “While GM has proposed a potential solution that would allow for the successful and rapid resolution of Delphi’s bankruptcy case, its lenders have rejected this proposal.”

Check this: GM now says the scheduled nine-week summer shutdown is Delphi related, not a non-sales related adjustment of production to demand. Reuters reports an interim “solution” to Delphi’s implosion: “Delphi has until May 4 to deliver details of its agreement for an additional $150 million from GM. The deadline for that agreement has been postponed several times, most recently by the intervention of the U.S. Treasury.” Gee, I wonder why. Tsk tsk. Another mouth to feed—with out taxes, ‘natch.

GM agreed earlier this year to increase to $450 million the payments it has promised to the parts maker, from an originally agreed $300 million.

GM is also seeking court approval to buy Delphi’s steering business, a transaction opposed by various parties and also blocked by the U.S. Treasury. The court will hold hearings on the matter next month.

Don’t worry! The Presidential task Force on Autos will handle this! Alternatively, do. Worry, I mean.

Robert Farago
Robert Farago

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  • Moedaman Moedaman on Apr 24, 2009
    ZoomZoom : April 24th, 2009 at 11:28 am Re: Comments from moedaman, cardeveloper, MikeInCanada. I just don’t get it. If the car manufacturers were so horrible about paying for parts (and I don’t doubt you on this), then why even do business with them? I always wondered that myself. But sadly, in the Detroit area, those were the vast majority of jobs available. A friend of mine works in QA for a shop that 20 years ago dropped out of automotive and went into aerospace. They are a lot happier for it.
  • Lbc_conejo Lbc_conejo on Apr 24, 2009

    @ZoomZoom ...Why do business with them? This is an issue anywhere a market exists with a few buyers and many sellers. The buyer has all of the power and the sellers make less than fair returns until they go out of business or prices rise. Theoretically, suppliers should merge until pricing power becomes more equal. This mess will get far more complicated and costly (especially to the taxpayer) before it's over. Once there's a plan in place for GM and Chrysler, I think we should put a national sales tax in place on all car sales to help pay for this. It would be a lot fairer than for all taxpayers' to foot the bill.

  • Dukeisduke Is the Volvo EX30 even on sale yet? It was pulled from the NACTOY awards because they were having software problems with the vehicle.
  • Wjtinfwb If you've only got 5k to spend on transportation, I cannot imagine a worse way to spend it than on a GM orphan from Sweden that's 15 years old with 150k on the clock and limited plus expensive parts availability and dwindling techs who'd even want to work on it. Go find a similar vintage Camry or Accord with 150k miles or even a Ford or a Chevy, whatever. Hell, even an old Jaguar is less of a crapshoot than a Saab. At least you can still get parts.
  • Kwik_Shift Brands that were considered from China include BYD, Dayun, Great Wall Motors, Maxus, Nio, Omoda/Chery, Seres, XPeng, and Zeekr. KG Mobility from South Korea also made the list of candidates.That's a lot of car companies from there ready to head here.
  • Analoggrotto Clean sweep and unanimous victory for the world affluence engine of 22nd century : Hyundai/Kia/Genesis. Toyota and Lexus, for 120 years of history have not been able to capture the zenith superlative status of Hyundai Motor Corporation the most awarded, decorated and revered automotive corporation in the history of historical. Featuring best ever, first ever and greatest ever e-ATPs the Hyundai Genesis Kia lineup is posed to become the envy of every country club, ivy league college and fortune 500 corporation in the world. I've been taking a roadtrip in my loaner Elantra N, visiting colleges from east to west, elite universities of higher learning to inspect their parking lots. WHat did I find? Leagues of Genesis models, outnumbering Lexus 3 to 1. When I interviewed faculty and staff at these places of greater learning, their response was unanimous : they chose HMC for the ATPs.
  • Mikey 2019 Chevy Impala Premier FWD with 20 inch factory Bridgestones. I'm looking at replacing tires at the 65,000 KLM's (40,000 miles ) mark ....It doesn't thrill me .. I'm pricing Michelin Cross Climate 2 tires ouch !! ..Up here in Canuckastan ....Big $$$$$
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