Delphi Corp. says it will not assume responsibility for its pension plans when it emerges from Chapter 11 bankruptcy protection, under modifications to its reorganization plan filed Monday, June 1, in U.S. Bankruptcy Court in New York.
According to a Delphi news release, the “remaining assets and liabilities of Delphi’s hourly pension plan will be addressed by GM.” General Motors accepted $2.1 billion of net unfunded liabilities for the hourly pension plan on September 29.
The auto parts maker’s combined defined-benefit plans totaled $6.147 billion as of December 31, according to its annual report.
Delphi said in its release that it explored “numerous alternatives” for the salaried plan and plans of certain subsidiaries, but none was “feasible” and as a result, the Pension Benefit Guaranty Corp. “may initiate involuntary termination” of the company’s salaried pension plan.
The Delphi statement said the PBGC “is expected to enter into a settlement with Delphi” that will result in it getting an unsecured claim once the firm emerges from Chapter 11.
PBGC spokesman Jeffrey Speicher said the agency has not reached a final settlement with Delphi, has not decided to terminate the Delphi plans and has held a substantial unsecured claim against the auto parts maker since it went into bankruptcy protection in October 2005.
Delphi spokesman Lindsey Williams did not return a call seeking comment.
The release said that as part of the new plan, Parnassus Holdings II, an affiliate of private equity manager Platinum Equity, will acquire and manage Delphi’s U.S. and non-U.S. operations after the bankruptcy for $3.6 billion. GM will provide Delphi with up to $250 million of capital through July 31 as part of the reorganization.
GM will acquire some of Delphi’s U.S. manufacturing operations and its global steering business.
The approval hearing for Delphi’s revised reorganization plan is scheduled for July 23.
Filed by Christine Williamson of Pensions & Investments, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.
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