GM Comments on Delphi Filing Under Chapter 11

DETROIT - General Motors Corp. today said it expects no immediate effect on its global automotive operations as a result of Delphi Corp.'s Chapter 11 filing.

GM plans to work constructively in the Chapter 11 proceedings with the court, Delphi, its unions and other participants in Delphi's restructuring process. GM's goal is to pursue outcomes that are in the best interests of GM and its stockholders, and that enable Delphi to continue as an important supplier to GM.

Delphi has indicated to GM that it expects no disruption in its ability to supply GM with the systems, components and parts it needs as Delphi pursues a restructuring plan under the Chapter 11 process. Although the challenges faced by Delphi during its restructuring process create operating and financial risks for GM, that process is also expected to present opportunities for GM over time.

For example, on the one hand, Delphi or one or more of its affiliates may reject or threaten to reject individual contracts with GM, either for the purpose of exiting specific lines of business or in an attempt to increase the price GM pays for certain parts and components. As a result, GM might be adversely affected by disruption in the supply of automotive systems, components and parts which could potentially force the suspension of production at GM assembly facilities.

On the other hand, GM estimates that it currently pays a purchase price premium to Delphi in the aggregate of approximately $2 billion a year above globally competitive market prices for systems, components and parts purchased from Delphi's North American operations. GM believes that a restructuring of Delphi through the Chapter 11 process provides GM with an opportunity to reduce or eliminate that purchase price premium, over time, as well as improve the quality of systems, components and parts it procures.

In connection with the Delphi split-off, GM has provided limited guarantees with respect to certain benefits payable by Delphi to former GM U.S. hourly employees who transferred to Delphi relating to pensions, post-retirement health care and life insurance. The Delphi Chapter 11 filing does not by itself trigger any of the benefit guarantees.

GM intends to provide additional information regarding matters affecting GM due to Delphi's filing under Chapter 11 as soon as practicable.