Cerberus Group's Plan to Buy Delphi Hits Hurdle: WSJ
An investor group's plans to buy bankrupt auto parts maker Delphi has hit a snag, with the union not agreeing to cut future wages and benefits for new hires, the Wall Street Journal reported on its Web site on Tuesday.
The group of investors, led by Cerberus and Appaloosa Management, has offered to back a $3.4 billion financing plan to support Delphi's emergence from bankruptcy.
Cerberus has expressed concerns to the union, United Auto Workers, General Motors and Delphi about the auto parts maker's profitability a few years from now, when new hires's pay increases, the Journal reported.
The burden of keeping negotiations at Delphi going has fallen on GM, the paper said, adding that it could force GM to further subsidize wages and benefits for new and future employees at Delphi.
The standoff could also affect Cerberus's plan to acquire DaimlerChrysler's Chrysler Group, the Journal said.
Delphi, Cerberus and UAW could not be reached for comment immediately.