Delphi has said it cannot reach a deal with GM to extend an agreement under which GM would pay higher prices for Delphi components, according to Reuters.

As of 1 April Delphi is obliged to reduce its prices to GM as part of existing contracts. GM had foregone the price reductions in the first quarter and Delphi had hoped to extend this arrangement into the second quarter.

Delphi has asked a bankruptcy court judge for permission to to end unprofitable contracts with GM. A hearing is scheduled for 12 May.

According to SupplierBusiness, GM believes it is paying US$2bn above market rates for components it buys from Delphi. SupplierBusiness also says that GM and Delphi managers have protected each other for years. It is only by ending that the radical change that is needed at both companies can take place.

Delphi restructuring analysis