Delphi Stealth Bailout Approved By China

Edward Niedermeyer
by Edward Niedermeyer

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).

Edward Niedermeyer
Edward Niedermeyer

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  • Mpresley Mpresley on Sep 29, 2009

    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.

  • SCE to AUX SCE to AUX on Sep 29, 2009

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

  • Vento97 Vento97 on Sep 30, 2009

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

  • Panzerfaust Panzerfaust on Sep 30, 2009

    ChristyGarwood; 'contributed to GM' ? TARP was a contribution? It is just you.