Delphi, the former parts operation of GE (NYSE:GM) wants out of Chapter 11. It had a $6.1 billion exit package, but the credit markets have crushed that. Now GM is faced with having to throw Delphi a rope.
What can be done? According to Reuters "GM’s latest offer: $2.25 billion that had been scheduled to be paid out to the automaker in cash can instead be converted into debt for Delphi."
With troubles at its North American operations growing due to a slowing domestic market, GM hardly needs more trouble. It’s GMAC business, now majority owned by Cerberus, is also in trouble due to real estate lending buy the company.
GM’s problems now run across three fronts and that is at least two too many.
Douglas A. McIntyre