Delphi creditors want judge to void GM contracts
Delphi creditors want judge to void GM contracts
Company is also seeking wage and benefit reductions from with the United Auto Workers and other unions.
By Sarah Karush
Associated Press
DETROIT Delphi Corp.'s creditors asked a bankruptcy judge to approve the auto supplier's bid to reject about 5,000 contracts with its biggest customer, General Motors Corp.
Delphi asked U.S. Bankruptcy Judge Robert Drain in March to void supply contracts with the automaker.
GM, Delphi's former parent, filed an objection earlier this month, saying Delphi's request was tantamount to blackmail and that monetary damages "could easily exceed $1 billion per month."
Delphi employs about 13,000 workers in Ohio in the Dayton, Warren, Columbus and Sandusky areas.
In the filing Thursday, the committee representing Delphi's creditors in bankruptcy court in New York said voiding the contracts is essential to the company's "efforts to obtain, whether voluntarily or involuntarily, GM's contribution to solve the problems that GM created."
The creditors said Delphi makes clear that it does not intend to stop supplying parts to GM, but, at most, to raise the prices.
"GM would have this court believe that, when faced with the choice between paying more for its parts or shutting down its production, GM would choose to shut down its production," the creditors said. "It is simply not credible to believe that GM would choose suicide over survival."
In its own filing Thursday, Troy, Mich.-based Delphi denied it was holding the threat of a shutdown over GM's head and predicted the companies would agree on new pricing.
Delphi has also asked Drain to allow it to throw out its contracts with the United Auto Workers and other unions. Last week, Drain agreed to postpone a hearing on that request until Aug. 11 to let the parties focus on negotiations. Delphi requested the postponement after agreeing with the UAW and GM on buyouts for all its UAW-represented workers.
A hearing on the GM contracts is scheduled for Aug. 15.
Delphi is still negotiating with the UAW on wage and benefit reductions and has said it would prefer a negotiated settlement to court action.
At the close of the UAW convention in Las Vegas on Thursday, President Ron Gettelfinger said the union and Delphi were not close to an agreement. He praised now-retired Vice President Dick Shoemaker for negotiating buyout and early retirement offers for Delphi workers, but said the matter would not be resolved soon.
Union officials said about 25,000 GM workers and 8,500 from Delphi have agreed to take buyout or early retirement offers.
GM's shares rose 23 cents, or about 9.1 percent, to close at $25.59 on the New York Stock Exchange. Delphi's shares no longer trade on the NYSE.
Copyright ©2006 Cox Ohio Publishing, Dayton, Ohio, USA. All rights reserved.
Company is also seeking wage and benefit reductions from with the United Auto Workers and other unions.
By Sarah Karush
Associated Press
DETROIT Delphi Corp.'s creditors asked a bankruptcy judge to approve the auto supplier's bid to reject about 5,000 contracts with its biggest customer, General Motors Corp.
Delphi asked U.S. Bankruptcy Judge Robert Drain in March to void supply contracts with the automaker.
GM, Delphi's former parent, filed an objection earlier this month, saying Delphi's request was tantamount to blackmail and that monetary damages "could easily exceed $1 billion per month."
Delphi employs about 13,000 workers in Ohio in the Dayton, Warren, Columbus and Sandusky areas.
In the filing Thursday, the committee representing Delphi's creditors in bankruptcy court in New York said voiding the contracts is essential to the company's "efforts to obtain, whether voluntarily or involuntarily, GM's contribution to solve the problems that GM created."
The creditors said Delphi makes clear that it does not intend to stop supplying parts to GM, but, at most, to raise the prices.
"GM would have this court believe that, when faced with the choice between paying more for its parts or shutting down its production, GM would choose to shut down its production," the creditors said. "It is simply not credible to believe that GM would choose suicide over survival."
In its own filing Thursday, Troy, Mich.-based Delphi denied it was holding the threat of a shutdown over GM's head and predicted the companies would agree on new pricing.
Delphi has also asked Drain to allow it to throw out its contracts with the United Auto Workers and other unions. Last week, Drain agreed to postpone a hearing on that request until Aug. 11 to let the parties focus on negotiations. Delphi requested the postponement after agreeing with the UAW and GM on buyouts for all its UAW-represented workers.
A hearing on the GM contracts is scheduled for Aug. 15.
Delphi is still negotiating with the UAW on wage and benefit reductions and has said it would prefer a negotiated settlement to court action.
At the close of the UAW convention in Las Vegas on Thursday, President Ron Gettelfinger said the union and Delphi were not close to an agreement. He praised now-retired Vice President Dick Shoemaker for negotiating buyout and early retirement offers for Delphi workers, but said the matter would not be resolved soon.
Union officials said about 25,000 GM workers and 8,500 from Delphi have agreed to take buyout or early retirement offers.
GM's shares rose 23 cents, or about 9.1 percent, to close at $25.59 on the New York Stock Exchange. Delphi's shares no longer trade on the NYSE.
Copyright ©2006 Cox Ohio Publishing, Dayton, Ohio, USA. All rights reserved.
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