General Motors Steps Up Delphi Support To $10.6 Billion

Detroit, MI (AHN) - General Motors will provide $10.6 billion in financial assistance to Delphi Corp. enabling the parts maker emerge from bankruptcy protection by the end of the year.

Delphi Corp. said its former parent company will take on $3.4 billion in pension obligations for hourly workers. GM originally planned to take on $1.5 pension liabilities.

The move saves Delphi from a potential lawsuit as the U.S. Pension Benefit Guarantee Corp. threatened to file a $900 million claim against the company if it did not strike a deal to transfer the hourly pensions to GM.

The company plans to freeze pension plans once it receives permission from the union to proceed.

Delphi plans to seek court approval of the new deal on Sept. 23. Delphi was originally a spin off of GM's part manufacturing division.

Delphi has been under chapter 11 bankruptcy protection since October 2005.