Business & Finance
Bankrupt auto parts giant Delphi Corp. needs a guarantee from its No. 1 customer, General Motors, for $1 billion a month in business to pay for its underfunded pension plan, the Financial Times reported, citing remarks by chief executive Steve Miller. But a spokesman for the auto-maker told the publication, "I don't think we would do that." GM already has an agreement with ex-Delphi employees to guarantee their pensions and benefits - to the tune of about $11 billion. The Financial Times also quoted Miller as saying that if Delphi's restructuring does not progress well, the company could be sold off in pieces, "perhaps fatally wound[ing] GM," its onetime parent. Meanwhile, industry analysts told Reuters that Delphi ultimately may have to ask the federal Pension Benefit Guaranty Corp. (PBGC) to assume its pension obligations, as bankrupt United Airlines and US Airways have done. Miller previously was chief of Bethlehem Steel, which also shifted its pension obligations to the PBGC in 2002.
In another blow to the troubled auto parts industry, Dana Corp. said it will restate earnings for the past six quarters due to accounting problems, will delay this week's scheduled posting of its third-quarter results, and must rescind its profit forecast for this year. Its stock fell 34 percent Monday on the news and has lost half its value since mid-September. Dana is based in Toledo, Ohio, and makes axles, brakes, and transmissions for cars and trucks.
In a "friendly" mining industry takeover, Inco Ltd. will buy rival Falconbridge Ltd. in a $10.6 billion deal that creates the world's largest producer of nickel, reports said. Both companies are based in Toronto.
Lincoln National Corp. agreed to pay $7.5 billion for financial services rival Jefferson-Pilot of Greensboro, N.C., Monday. The deal will make Philadelphia-based Lincoln the nation's largest seller of universal life insurance policies and one of the industry's biggest publicly traded companies. The buyer had no immediate comment on the fate of Jefferson-Pilot Communications, a subsidiary that owns TV and radio stations and produces syndicated programming of major-college football and basketball games.