How Long a Delphi?

Back 100 years ago, when men were men....

Ah, fuggedaboutit.

Delphi is the new monicker for Delco, (AKA AC-Delco), the former parts division of GM. A few years ago Delphi went into Chapter 11. That was perhaps the most highly visible marker in the long downward spiral of automotive manufacturing in the USA.

Now it appears that Delphi may NOT emerge from Chapter 11.

A private equity group said Friday it has terminated its agreement to invest $2.55 billion in auto parts supplier Delphi Corp., which has been trying to emerge from bankruptcy protection.

The announcement by hedge fund Appaloosa Management LP could have major consequences for General Motors Corp., which once owned Delphi until it was spun off in 1999. Delphi is still GM's biggest parts supplier.

The Appaloosa-led investment was an essential pillar in Delphi's reorganization, which has been held up because of a tight credit market. The loss of the deal puts Delphi's plan to exit bankruptcy at risk.

Initially, Delphi was caught in the supplier-squeeze of GM, which became notorious for demanding annual reductions in parts-prices from its suppliers. Over time, the squeeze became too much for Delphi (and others.) Like a number of others, Delphi is saddled with enormous benefits costs and a lot of other labor-oriented baggage. To be fair, that baggage includes pensions and healthcare for Delphi's white-collar workforce, too.

There are some events which history will note. If Delphi/AC-Delco/Delco does not survive, it will be noted.