GM will supplement the wages of employees at its former subsidiary, Delphi, according to Financial Times Deutschland. As a result an agreement to restructure Delphi, supported by GM, appears to be closer.
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By agreeing to the subsidies GM hopes to avoid a labour dispute at Delphi, which would be crippling to GM’s business. Delphi derives around 50% of its business from GM, and is GM’s most important supplier.
Delphi filed for Chapter 11 bankruptcy reorganisation of its operations in the United States in New York on 8 October last year and as part of the reorganisation, management has been calling for drastic pay cuts and the cull of 22,000 jobs of 177,000.
At the end of September, Delphi said that 12,400 employees had opted for voluntary retirement by January 1, 2007. Under that programme GM assumed financial obligations related to lump sum payments to employees for accepting voluntary retirement incentives, and post-retirement employee benefit obligations.
Earlier this week Delphi announced that it is considering the sale of its power products group. The business develops and manufactures power lift gates, power deck lids, power sliding doors, and power cinching latches and strikers.
