Here are some scenarios for bankrupt supplier Delphi that could follow a Friday, May 29, hearing in U.S. Bankruptcy Court.
• Delphi is broken up and sold in pieces at auction.
• GM buys select U.S. Delphi factories to ensure supplies.
• U.S. Treasury helps Delphi unload money-losing business lines by subsidizing prices to competitors that take the work.
• Delphi uses government loans to bring its healthier overseas operations out of bankruptcy.
Hearing this week
On Friday, May 29, Delphi has a critical court hearing to explain its plan to emerge from Chapter 11.
Opinions vary on whether Delphi will be broken up and sold off in pieces as part of a bankruptcy liquidation.
Now is the opportune time for liquidation, says Aaron Bragman, an auto analyst with IHS Global Insight.
GM and Chrysler LLC, two of Delphi's biggest customers, are on extended production shutdowns. Delphi could be broken up and sold or possibly returned in some part to GM, without causing major industry production interruptions, Bragman says.
This year GM sought to take back steering-parts factories from Delphi to ensure supply when a deal fell through to sell the steering business to a hedge fund. But the White House automotive task force halted that action and is reviewing how Delphi fits into GM's long-term supply plans.
Viable in normal times
Others aren't so convinced Delphi should be completely busted up. The suburban Detroit supplier has many high-quality technologies, and its overseas operations were profitable until the recent worldwide auto recession, says Dave Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich.
Source: http://www.autonews.com/article/20090525/ANA03/305259959/1128 
