Auto supplier Delphi, a former subsidiary to General Motors, formally exited bankruptcy protection on Oct. 7 after four years of court-supervised restructuring.
The new Michigan-based company will be just a fraction of its former size, having shed 37 of its 44 U.S. plants and eliminated tens of thousands of jobs.
Four of those remaining plants will return to GM, which emerged from bankruptcy protection in July after a massive government bailout, while the fate of the final three remains unresolved.
Most of Delphi's international operations -- which were not included in the bankruptcy filings -- will be folded into the new company, which will employ over 100,000 people in 32 countries.
GM has booked about $12.5 billion in related charges since Delphi filed for bankruptcy in October 2005, said GM spokesman Tom Wilkinson. Another $1.1 billion will be spent to acquire the four U.S. plants and most of Delphi's steering manufacturing operations and engineering centers in Europe, Mexico, South America and Asia.
GM is also investing about $1.7 billion in the new company.
"We're pleased to see a final resolution to the bankruptcy and wish the newly emerged Delphi success," said GM chief executive officer Fritz Henderson. "The closing transactions allow Delphi to effectively serve its customers by focusing on its core business. The agreements also enable GM to access essential components and steering technologies."
Delphi said its balance sheet will be "sufficiently capitalized to invest in technology, and to absorb planned restructuring and resultant social costs as the company consolidates excess capacity around the world."
"We are excited about the potential for our future and for assuring that Delphi remains among the premier supply companies in the world," said Rodney O'Neal, who will remain Delphi's president and chief executive. "We are a more agile, nimble and resilient company and are eager to begin the next part of our journey with our customers, employees and suppliers."
Copyright Agence France-Presse, 2009
