Bailout Watch 545: Feds Fund $2.5 Billion Back Door Delphi Bailout
As predicted, the feds have bailed out bankrupt parts maker and former GM division Delphi, through GM, to the tune of $2.5 billion. That doesn’t include the $250 million direct subsidy from American taxpayers. On other hand, GM no longer needs to buy those five Delphi factories GM as previously reported. The cash for the Delphi buyout arrives via one of those “follow the money” deals, as the Wall Street Journal reports. “GM will provide more than $2.5 billion of the $3.6 billion necessary for Beverly Hills-based buyout firm Platinum Equity to gain control of Delphi, according to a person familiar with the matter . . . Under the terms of the transaction, Platinum is expected to invest no more than $750 million, according to the person familiar with the deal. GM would provide the balance in financing. Those financing commitments may or may not be drawn upon in the future, depending on how Delphi performs. The terms of the GM loans couldn’t be learned.” So much for GM CEO’s promise of transparency at yesterday’s Senate hearing.
@long126mike: Thank you for the more accurate numbers. I was generalizing the typical monthly O.R. budgets. The $27.2 Billion in expenses for the first quarter is significantly lower than 'normal' due to plant closures, layoffs, and a complete lack of any launch activity. I don't think they'll ever get back to $15 Billion a month for a budget with all of the cutbacks and C11 shedding of liabilities, but nonetheless, even now they're burning nearly $3 Billion per quarter so the $30 Billion in the kitty might not last too long.
Dear Mr. Clark: My brother was a 30+ employee of GM. College graduate, smart, exemplary family man, terrific brother. He took a job with GM right out of college and never looked back. He was fiercely dedicated to GM. He worked very long, hard hours for GM the entire time he was with the company. And he was successful. A few years ago he retired. This week he learned his GM pension is no longer. Gone, thanks to the greedy UAW to whom GM is married and who took it all and GM’s own financial mismanagement. And now GM wants a bailout. Here’s my “special offer” to you. I will continue to purchase GM cars if you immediately reinstate my brother’s full pension. He gets it all. He earned it. He depended on it and he worked his life for it and he trusted you to deliver. If not, I am forever through with GM. That’s the deal.
So will Visteon get the same bailout?
I see that the judge in the Delphi case ordered an auction of Delphi assets, rather than going along with the government plan to sell only to Platinum Equity at a fixed price.