GM's Take on Delphi-PBCG Agreement

American manufacturer General Motors issued a statement yesterday regarding the agreement between automotive parts supplier Delphi and the Pension Benefit Guaranty Corporation (PBGC). The manufacturer says it understands the difficult situation in which Delphi employees and retirees found themselves in and expresses its support for Delphi's emergence from bankruptcy. Yesterday, Delphi reached an agreement with the PBGC to provide a $3 billion allowed general unsecured non-priority claim.

Below are excerpts from GM's press release.

"There have been questions about General Motors Company’s responsibility toward Delphi’s pension plans, given that many of those covered were GM employees prior to GM spinning off Delphi in 1999. General Motors Corporation made appropriate provisions for the plans at the time of the spin-off, and Delphi became responsible for the plans from that point forward."

"General Motors Company and PBGC have reached a preliminary agreement whereby the PBGC would receive a $70 million cash payment from GM, as well as a portion of future distributions to GM from the new company that acquires Delphi assets upon resolution of its bankruptcy. GM expects to receive such distributions in return for capital contribution to the new company. Details will be communicated after the Delphi bankruptcy agreement is finalized."

"This is a very difficult situation, and we understand the personal sacrifices that Delphi employees, retirees, and many others, including GM employees and retirees, have made and continue to make during this industry-wide crisis."

"However, GM has met and continues to meet its obligations toward the Delphi pensions, and General Motors Company continues to support Delphi’s emergence from bankruptcy at considerable cost to the company."