Jan 22, 2007
Delphi Corporation, GM’s parts division that was spun off into a phony “bankruptcy,” just rejected a 4.7 billion-dollar buy-out bid from Highland Capital private equity fund. Delphi said it was doing quite well with the 3.4 billion-dollar offer from the Appaloosa and Cerberus funds.
Does this sound like a desperately bankrupt company, turning its back on 1.3 billion extra dollars? No? Well, you’re right. It was never desperately bankrupt. But to break the workers’ wages and benefits down to non-union levels, GM put Delphi through this long bankruptcy charade.
As for those funds – Cerberus happens to be the same fund that holds an option on buying GMAC, the hugely profitable GM finance arm that books most of GM’s official profits. When Delphi rejects a rival fund’s extra billion-plus dollars, management is simply revealing its ongoing plan to keep all the GM assets under some form of GM control.
In this game, only the workers are supposed to lose.