Methode Sues Delphi

After earlier today good news for American supplier came, following the approval by US anti-trust officials of GM's buy offer, trouble ahead, once again, for Delphi. Methode Electronics, supplier of electro-mechanical devices, sued Delphi following the latter's decision to terminate a three-year supply agreement.

The agreement, initially in effect until September 30, 2011, called for Methode to supply Delphi with silicone-filled sensor pads to be used in passive occupant detection systems. Now, Delphi notified Methode that starting September 10, this year, purchase orders will be cancelled. The same pads are at the center of yet another litigation between the two, this time over patents.

"If we are not successful in this pending litigation, we believe demand for these sensor pads and our overall financial condition and results of operations will be materially adversely affected," Methode said in a filing with the US Securities and Exchange Commission cited by Reuters.

On the bankruptcy front, Delphi hopes it will manage, after 4 years, to exit bankruptcy protection. After the court approved the sale of its assets to GM and a group of lenders in July, GM got today the final "go'" to take over.

GM will split Delphi's assets in two new subsidiaries. GM Components Holdings will be comprised manufacturing facilities in New York (Thermal Systems in Lockport and Powertrain Systems in Rochester), Michigan (Powertrain Systems Grand Rapids) and Indiana (Electronics and Safety in Kokomo).

Global Steering Holdings will include Delphi’s Steering operations in Saginaw, Michigan, and most of the global steering manufacturing operations and engineering centers in Europe, Mexico, South America and Asia.


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