New York Investment Firm Top Candidate to Buy GM's Delphi Plants

09/26/96

The Associated Press reported that the trade weekly Automotive News published an article declaring that a New York investment firm has become the leading candidate to buy four General Motors' Delphi Division parts plants in Michigan and Canada.

The report said Joseph Littlejohn & Levy wants to buy the plants as part of its strategy to form a $1 billion independent automotive parts supplier. As usual, Delphi division spokesperson Cheryl Kilborn declined to comment on the report, although she did say that Delphi expects the sale of the plants to be completed by the end of the year: "we can't confirm the names of potential buyers. We've signed confidentiality agreements, so we're not in a position to comment."

Automotive News also said that officials from Joseph Littlejohn & Levy could not be reached, and that the company declined to comment. The investment firm has become a major player in the auto parts industry since it bought Motor Wheel Corporation in 1986. The company turned turned Motor Wheel's economic position around and ended up merging it with Hayes Wheels International Inc. earlier this year. Joseph Littlejohn & Levy, retained a 43 percent interest in the company after the merger.

The GM-Delphi plants on the chopping block are two in Michigan (Livonia and Flint) and two in Ontario, Canada (Windsor and Oshawa). GM put the plants up for sale in April; all of them make components for car interiors.

Whitey Hale, president of United Auto Workers Local 326 at the plant in Flint, told Automotive News that he expected GM to announce the sale soon and that company officials had told him the prospective buyer was the investment firm.

GM's Delphi Automotive Systems hopes that the sale of the plants will help it cut costs, improve efficiency, and return 14 of its plants to profitability. GM currently makes more of its car parts in-house than either of the other two big Detroit carmakers. The company has expressed its desire to outsource more parts work.

Automotive News quoted unidentified industry and union sources who said that the investment firm planned to keep most of the 5,900 workers at the plants and honor their union contracts. The sources also said that any surplus workers would be offered other jobs with GM.

The potential sale of plants in Canada is an issue in this year's contract negotiations between the Canadian Auto Workers and GM of Canada. CAW President Buzz Hargrove has said the union will fight to get GM to reverse its decision to sell the plants.

Paul Dever -- The Auto Channel