 Delphi boss Robert Miller has warned of more bankruptcies |
Troubled auto-parts firm Delphi will borrow $2bn (�1.1bn) to pay staff and cover daily running costs as it tries to emerge from bankruptcy protection. Delphi, which made a loss of $741m in the first half of 2005, filed for Chapter 11 protection at the start of this month, blaming weak demand.
It is in the process of restructuring its finances, but warned that it will have to cut jobs, wages and benefits.
Delphi's problems have weighed heavily on former parent firm General Motors.
DIP financing
General Motors' shares fell 7% on Thursday after the firm revealed it was being probed by US regulators over the way it books pension liabilities.
The company said it would underwrite many of Delphi's pension costs, after it spun off the firm in 1999.
Delphi has been both open and damning about the problems facing the auto industry, claiming that unless workers are willing to accept harsh changes then there are likely to be many other bankruptcies.
The latest loan - called "debtor-in-possession" financing - was approved by a bankruptcy judge and will give Delphi time to renegotiate terms with debtors and workers.
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