US: Cerberus reported to be in talks to buy Delphi plants
Monday, December 04, 2006, AutomotiveWorld.com
Investment firm Cerberus Capital Management intends to purchase 12 of Delphi's US plants and is presently in talks with the company and its largest union, the United Auto Workers, according to Bloomberg, which cites sources 'familiar with the negotiations'.
The firm, however, wants the union workers to accept lower wages and is negotiating with Delphi to buy as many as 12 of the company's European factories as well, the report stated.
Pressure is also mounting on Delphi to reach an accord with the union and its former parent, General Motors, to cut wages and health-care costs.
Cerberus and two other private equity firms, Appaloosa Management and Ripplewood Holdings of New York, are among the parties that have been talking to Delphi, according to sources. All three firms expect to profit by buying the suppliers cheaply and by cutting costs.
Delphi, GM and UAW personnel are yet to comment.
In addition to the private equity firms, Wilbur Ross, Roger Penske, Continental and Robert Bosch have all publicly voiced interest in buying portions of Delphi.
Delphi plans to close 21 of 29 US plants by January 2008, and will stop manufacturing brakes, chassis, catalysts, cockpits, door modules, instrument panels, wheel bearings and steering systems. It plans to focus instead on powertrains, automotive safety products, entertainment and audio systems and navigation technologies.
Published on Monday, December 04, 2006
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