Contact Us

Home> International> News detail

Cerberus may drop plan to invest in Delphi Corp

John Lippert From Shanghai Daily| January 29 , 2007

CERBERUS Capital Management LP may drop a planned US$3.4 billion investment in bankrupt auto-parts supplier Delphi Corp because the United Auto Workers union is resisting the financial firm's proposals for pay cuts, three people familiar with the situation said.

Cerberus has been negotiating with the union after agreeing last month to lead the investment in Delphi. David Thursfield, who heads Cerberus's automotive unit, set out his demands to UAW Vice President Cal Rapson in a meeting in Detroit last week, one of the people said. Thursfield is scheduled to meet with UAW leaders again today.

If the talks stall, Troy, Michigan-based Delphi may ask a United States bankruptcy judge to scrap the union's contract. The union has threatened to strike if the request is granted, leaving General Motors Corp, Delphi's biggest customer and former parent, without car parts.

"Thursfield's always been a hard case," said Sean McAlinden, an economist at the Center for Automotive Research in Ann Arbor, Michigan. "If he sees a business that just can't make it at all, he's going to say it's a bad deal. He won't do it."

Before voiding contracts, US Bankruptcy Judge Robert Drain in New York is likely to give the sides a final chance to reach a settlement, McAlinden said. Drain approved the bid by Cerberus and four other financial firms on January 12.

Thursfield, 61, a former Ford Motor Co executive, began talks with the UAW about his bid to take control of Delphi on January 8. Cerberus wants to finish by month's end.

The biggest issue for Cerberus is the UAW pay scale, the people said. Skilled trades workers at Delphi receive wages and benefits worth US$75 an hour. That's enough to erase any future Delphi profits, one of the persons said.

In 2006, about 23 percent of Delphi's workers were classified as skilled trades, McAlinden said. One solution to the dispute, he said, may be to lower this percentage to an industry-average 15 percent.

Gasgoo not only offers timely news and profound insight about China auto industry, but also help with business connection and expansion for suppliers and purchasers via multiple channels and methods.

All Rights Reserved. Do not reproduce, copy and use the editorial content without permission. Contact us: khoahocxaydung.info.

система автоматического полива растений



| | | |

Site: Khoahocxaydung| | | | |

Copyright Notice © 2017 Khoahocxaydung.info Corporation and its licensors. All rights reserved.