The Delphi Corp. bankruptcy saga, already four years old, must drag on a while longer until General Motors' future becomes clear.
Suitors for the parts maker's assets or investors in post-bankruptcy Delphi need to know the sales volumes they can expect from surviving GM brands before they can price the supplier, says Kirk Ludtke, senior vice president of CRT Capital Group LLC in Stamford, Conn.
For that, they'll have to wait until GM completes its own restructuring, either inside or outside of bankruptcy, Ludtke says. That means investors will stay on the sidelines and let GM continue to fund Delphi operating losses with federal bailout money, he says.
"Unfortunately, they remain joined at the hip," Ludtke says.
Delphi was spun off from GM in 1999 and still gets about 30 percent of its sales from GM. Repeated cash injections from GM have kept Delphi afloat. But GM CEO Fritz Henderson, facing a June 1 deadline to come up with a restructuring plan, has said it is probable that GM will file for bankruptcy.