Analyst: GM likely will avoid strike at Delphi

Saturday, May 13, 2006

Analyst: GM likely will avoid strike at Delphi

Dee-Ann Durbin / Associated Press


DETROIT -- General Motors Corp. stock rose Friday after an analyst upgraded the company's shares and said the automaker likely will avoid a devastating strike at Delphi Corp.

Brett Hoselton, an analyst with KeyBanc Capital Markets, upgraded GM's shares from "hold" to "buy" and said in a note to investors that he believes Delphi, GM and the United Auto Workers will reach an agreement as early as June that will avoid a strike.

Hoselton also said GM's earnings should improve this year and next because of the company's cost-cutting and its new lineup of pickups and sport utility vehicles.

GM shares closed up 28 cents at $26.09 on Friday.

Delphi, which filed for bankruptcy protection in October, wants to lower workers' wages and has been negotiating for months with the UAW and GM, its former parent and largest customer. Delphi was in court Friday asking a federal bankruptcy judge for permission to cancel its contracts, and the UAW is threatening to strike if that happens.

But Hoselton said the three parties already have dealt with the most significant hurdle in their negotiations, which was buyout deals for Delphi workers. GM has agreed to fund buyouts for about 13,000 of Delphi's 24,000 UAW members, and is allowing an additional 5,000 workers to flow back to GM.