DETROIT -- Delphi, the former parts unit of General Motors that became a multibillion-dollar liability to the automaker, today emerged from Chapter 11 bankruptcy after four years of court protection.

The once-giant parts supplier completed transactions to split the business between bankruptcy lenders, which will come away with the main global electronics business, and GM, which is taking back Delphi's money-losing U.S. manufacturing operations.

"We are grateful for the support and loyalty of our customers, who have placed their trust in Delphi's ability to provide world-class products and uninterrupted supply, and the support of our suppliers who have contributed broadly to our efforts," Delphi CEO Rodney O'Neal said in a statement.

Delphi's official corporate name is changing from Delphi Corp. to Delphi Holdings LLP. The U.S. Bankruptcy Court in New York already has approved the supplier's restructuring plan.

Delphi filed its petition Oct. 8, 2005 -- and at the time it was the largest bankruptcy in the history of the U.S. auto industry. Since then, the case has been eclipsed by the bankruptcies at Chrysler and GM. And many more U.S. suppliers, including at least 20 this year alone, have followed Delphi into Bankruptcy Court.

Time and money

The case, which was nearly settled in April 2008, has cost Delphi more than $400 million in legal and professional fees during the four years of proceedings, the company has acknowledged.

Presiding over the bankruptcy has been Delphi Chairman Steve Miller, who at first took a hard-line public stance against pay and benefits paid to Delphi's unions.

Miller outraged the UAW by initially demanding that Delphi workers take a pay cut to about $10 an hour from $28 an hour. At that point, the UAW walked away from the bargaining table for more than a year, according to a source familiar with the talks.

After a few months Miller went silent when GM complained about him stirring up labor trouble. He told the Financial Times this week that he had second thoughts about that decision.

“We thought everything would just go quiet while we quietly work these things out,” Miller told the newspaper. “As it turned out, our critics did not go quiet. So what we ended up with was that all the savage abuse we took in the press went largely unanswered. I'm not sure whether that was the right thing. As a leader, I think you've got to speak out.”

Last year, a deal to sell the company to Appaloosa Capital Management LP fell through after the New York investor backed out of an agreement to invest $2.55 billion into the company.

A shadow of its former self

As Delphi emerges from bankruptcy, it will be owned by investors and banks led by the private equity firms Elliott Management and Silver Point Capital. Those companies lent Delphi the money to operate in bankruptcy. They won an auction over the private equity firm Platinum Equity by agreeing to forgive about $3.5 billion in debt for ownership of the emergent Delphi.

Delphi will be a shadow of its former self. It will leave Chapter 11 as largely an electronics and air-conditioning maker with a manufacturing footprint predominantly outside the United States. Delphi's post-bankruptcy annual revenue is expected to be less than $10 billion vs. $22.59 billion in 2005, the year Delphi entered bankruptcy.

GM is the other big player in the Delphi saga. The carmaker, which spun off the parts-making operations in 1999, has spent about $12.5 billion over the past four years to lend Delphi money, buy out UAW workers and take other obligations off the supplier's hands.

GM's role continues. The company has agreed to buy Delphi's global steering business and five U.S. plants whose hourly work force is represented by the UAW. Throughout the bankruptcy, Delphi remained GM's single largest supplier of parts.

As part of the bankruptcy transaction, GM will assume more than $1 billion in Delphi obligations and waive $2 billion in claims. The automaker also plans to invest $1.75 billion and provide loans to Delphi.

During the bankruptcy, Delphi sold some non-core assets, including interiors and brakes. Any remaining non-core assets that were not previously acquired will be sold off or wound down through a new company, DPH Holdings Co., Delphi spokesman Lindsey Williams said.

Delphi, of suburban Detroit, ranks No. 7 on the Automotive News list of the top 100 global suppliers, with worldwide sales to automakers of $18.06 billion in 2008.

Press Release: Acquisition of Delphi Completed

Product Portfolio Focused on Innovation for Customer Challenges

Commitment to Technology and Strong Portfolio Among Top Priorities

Release Date: October 06, 2009

Troy, Mich., — Delphi Holdings LLP announced today it had completed the acquisition of substantially all of Delphi Corporation's global core businesses as part of the consummation of the Delphi Corporation Modified Plan of Reorganization.

Rodney O'Neal will remain President and CEO and the current leadership will continue to manage the company's global operations.

"We are grateful for the support and loyalty of our customers, who have placed their trust in Delphi's ability to provide world-class products and uninterrupted supply, and the support of our suppliers who have contributed broadly to our efforts," O'Neal said. "We are also thankful for the dedicated Delphi employees who remained focused on our customers, and the communities in which we operate for their unwavering support during the most challenging period in our history. Additionally, we are grateful for and recognize the sacrifice made by many constituent groups throughout our restructuring."

Delphi's balance sheet will be sufficiently capitalized to invest in technology, and to absorb planned restructuring and resultant social costs as the company consolidates excess capacity around the world, O'Neal said. "We expect 2010 gross engineering and R&D spending to be about 11 percent of sales, allowing us to maintain our intense focus on technologies, products and services that help our customers deliver vehicles that are safer, greener and allow purchasers to remain connected to their busy lives."

The company's product portfolio remains centered on electronics and safety; powertrain; thermal; electrical and electronic systems; OE service; and the independent aftermarket.

"We are clearly focused on game-changing technologies that meet market demands and help address societal concerns in an intense global environment. We expect that the industry and the competitive environment will continue to be demanding, but the restructuring we have already completed creates a strong platform and we expect to capitalize on that," O'Neal said. "We are excited about the potential for our future and for assuring that Delphi remains among the premier supply companies in the world. We are a more agile, nimble and resilient company and are eager to begin the next part of our journey with our customers, employees and suppliers."

Completion of the transaction in Russia and South Africa is subject to pending regulatory approvals.

The acquisition was led by Elliott Management and Silver Point Capital in their capacity as senior creditors of Delphi. Representatives from Elliott and Silver Point jointly stated that, "As major investors in the new Delphi, we believe this transaction will provide a solid financial foundation for the company's growth and success as a world leader in the global automotive industry. We are extremely pleased to have played a significant role in the creation of the new Delphi."

About Delphi

Delphi is a leading global supplier for the automotive, computing, communications, energy, and consumer accessories markets. Headquartered in Troy, Mich., Delphi has more than 100,000 employees in 32 countries. More information can be found at www.delphi.com.

PRESS RELEASE: GM Statement on Delphi's Emergence from Bankruptcy and the Closing of the Components and Steering Transactions

GM is pleased to close its transactions with Delphi and the Delphi debtor-in-possession (DIP) lenders, resulting in Delphi's emergence from bankruptcy.

Under the agreement, which was announced in July, GM and the Delphi DIP lenders formed a new company which acquired substantially all of Delphi's assets, other than the assets GM acquired directly. GM and the Delphi DIP lenders have both provided capital investment and back-up financing to the new company.

“We're pleased to see a final resolution to the bankruptcy and wish the newly emerged Delphi success,” said GM President and CEO Fritz Henderson. “The closing transactions allow Delphi to effectively serve its customers by focusing on its core business. The agreements also enable GM to access essential components and steering technologies.”

GM created two new, wholly owned subsidiaries under the agreement – GM Components Holdings LLC, and Steering Solutions Services Corporation. GM Components Holdings LLC includes four former Delphi component manufacturing facilities in Kokomo, Indiana; Rochester, New York; Lockport, New York; and Grand Rapids, Michigan. Steering Solutions Services Corporation includes all of Delphi's Saginaw steering operations and most of the steering manufacturing operations and engineering centers in Europe, Mexico, South America and Asia.

While final overseas approvals are still pending, the parties have been able to complete the transactions for the two subsidiaries, which provide GM with critical parts and technologies that are necessary to build its cars and trucks. In addition, the subsidiaries also have more than 60 non-GM customers in the automotive, motorcycle and heavy equipment industries. The new subsidiaries will provide all customers with reliable supplies and protect their intellectual property.

About General Motors: General Motors Company, one of the world's largest automakers, traces its roots back to 1908. With its global headquarters in Detroit, GM employs 219,000 people in every major region of the world and does business in some 140 countries. GM and its strategic partners produce cars and trucks in 34 countries, and sell and service these vehicles through the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Opel, Vauxhall and Wuling. GM's largest national market is the United States, followed by China, Brazil, the United Kingdom, Canada, Russia and Germany. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors Company acquired operations from General Motors Corporation on July 10, 2009, and references to prior periods in this and other press materials refer to operations of the old General Motors Corporation. More information on the new General Motors Company can be found at www.gm.com.