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http://biz.yahoo.com/ap/080923/delphi_bankruptcy.html?.v=2

Bankruptcy judge approves Delphi motion to freeze pensions; approval of deal with GM delayed


NEW YORK (AP) -- A bankruptcy judge on Tuesday approved Delphi Corp.'s proposal to freeze its pension plans as part of the auto supplier's blueprint to cut its costs and eventually emerge from bankruptcy protection.

Delphi also had been scheduled to seek approval for a deal with former parent General Motors Corp. that would boost GM's financial support of Delphi to $10.6 billion, up from $6 billion in an earlier plan. But U.S. Bankruptcy Judge Robert Drain adjourned the hearing until Thursday to allow attorneys for Delphi and its creditors time to settle objections to the motion.

Drain approved the company's motion to freeze the plans for salaried and hourly workers and replace them with new ones. However, changing the hourly workers' pensions still requires union approval. An earlier deal with Delphi's unions allowed the company to freeze the pensions but not until it emerged from bankruptcy.

Troy, Mich.-based Delphi was GM's parts-making unit until a 1999 spin-off. The automaker remains Delphi's biggest customer and has a keen interest in its survival because GM depends on its former subsidiary for parts to keep vehicle production going.

The company's creditors have objected to the latest deal between Delphi and GM, however, saying it would give GM too much control over Delphi's Chapter 11 process.

An earlier plan included the participation of a group of equity investors who said they would inject up to $2.55 billion into the company. That deal fell through in April when the investors, led by Appaloosa Management LP, backed out.

GM's support includes the assumption of $3.4 billion in pension obligations for hourly workers, instead of the $1.5 billion predicted earlier. It also would include $1.2 billion in cash through the end of 2008, which Delphi said would give it "ample liquidity" for the rest of the year.

Having more cash puts Delphi in better position to pursue loans in the restricted credit markets. The company's ability to get loans has been a key obstacle that has delayed its exit from bankruptcy.
 

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Jesus. GM is just never going to get out from under this mess. There's no way the union is going to ok their pensions being hacked up (I'm not even sure they should? would you?)

Maybe GM should just fork over whatever Delphi is asking just to end this miserable, PR-draining, nightmare for good.

Also, Delphi has been a disaster for 3 years now. Why is GM still their biggest customer? Why haven't they found someone else to buy from?
 
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