GM in Talks to Take Back Part of Delphi

By Velida Alemic

General Motors Corp. is in talks to take back large portions of Delphi Corp., the parts supplier spun off by the auto maker a decade ago, people involved in the negotiations said. The move is part of a strategy to qualify for additional government loans.

GM also is expected to pursue the closure of more auto-assembly plants beyond the nine shutdowns it has already announced, people familiar with the matter said.

GM has seen sales fall further than expected since it submitted a plan to Congress in December that said it will shrink to as few as 65,000 employees from 96,000 and cut its plants to 38 from 47 in North America in 2012. The deepening woes are putting pressure on GM to absorb the crucial auto-parts plants, even as it pares its car-making operations.

GM executives have been in negotiations over the Delphi plants since December. Delphi and its lenders have asked for at least $2 billion, according to people briefed on the talks. But GM hopes to pay little or nothing because of previous agreements with Delphi -- and because of the plight the auto-parts maker finds itself in. At the heart of the talks: up to five Delphi plants that produce exclusive parts for GM, including steering systems, radios and air conditioners for models such as the Cadillac CTS and Chevrolet Silverado.

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