GM to use chunk of aid to buy part of Delphi

[rickaren]

GM to use chunk of aid to buy part of Delphi

Posted Tuesday, Nov 3, 2009, 4:19 pm in Employee News

General Motors Co. said it has received permission to use $2.8 billion of its government aid to help buy part of troubled auto parts supplier Delphi Corp., the automaker’s former parts division, the Detroit Free Press reported.

The Detroit automaker said Monday in a regulatory filing with the U.S. Securities and Exchange Commission that the Treasury Department granted the release of $1.7 billion to acquire “a membership interest” in the new Delphi entity that emerged from bankruptcy protection, the paper said. The size of the stake was not disclosed, but GM is expected to receive a minority interest in the auto supplier that will diminish over time as GM is repaid for its investment, the Free Press said.

GM will use $1.1 billion to buy Delphi’s global steering business and four parts manufacturing facilities, ensuring a steady stream of critical parts to the automaker, the paper said. Delphi produces about 10 percent of the parts used in GM’s global manufacturing, and its components go into nearly all of GM’s North American production lines, the story said. (Detroit Free Press)