- The Washington Times - Thursday, April 2, 2009

NEW YORK (AP) - Officials from Delphi Corp. and its former parent General Motors Corp. will meet with representatives from President Barack Obama’s auto task force on Monday for talks that could get the struggling auto supplier out of bankruptcy protection.

U.S. Bankruptcy Judge Robert Drain on Thursday approved a timetable for the parties to reach some kind of deal, setting a deadline of April 17 for Troy, Mich.-based Delphi to submit its plan. The talks will also involve Delphi’s lenders and creditors.

Delphi attorney Jack Butler welcomed the task force’s involvement in the supplier’s restructuring.

“We now not only have the engagement of lenders and creditors but also the task force, and that’s very positive news,” Butler said after a hearing in Manhattan bankruptcy court.

Butler said he expects the talks in Washington to focus on resolving Detroit-based GM’s role in Delphi’s restructuring, as well as the future of Delphi’s hourly and salaried pensions.

Thursday’s hearing came a day after the auto task force filed a motion saying it needed until the end of April to consider whether GM can increase its credit commitments to Delphi by $150 million, in connection with the sale of Delphi’s steering business back to the automaker.

GM, which has already received $13.4 billion in federal aid and is asking for more, needs Treasury Department approval before it can buy the business.

Delphi has been operating under Chapter 11 bankruptcy protection since October 2005. The auto supplier has been slashing costs, shutting plants and selling off noncore businesses in an attempt to eventually emerge from court protection.

But amid the auto industry’s difficulties, the company has had a hard time finding the financing it needs. It has had to rely on GM, which still relies on Delphi to supply parts for many of its models.

At Thursday’s hearing, Drain also approved a settlement between Delphi and a group representing its salaried retirees that establishes a fund that will be used to help pay for some retirees’ health care costs.

In March, Drain approved Delphi’s request to stop paying for the retirees’ health care and life insurance benefits as of April 1, agreeing with Delphi that the company needs the cost savings to restructure. The retirees group subsequently filed an appeal.

Under the settlement, Delphi will pay $8.8 million to the retirees group in installments this year. Dean Gloster, an attorney representing the group, said the money will be used to set up a hardship fund for retirees hit particularly hard by the loss of benefits. It also may hire an outside company to help dole it out as partial subsidies of retirees’ health insurance premiums, he said.


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