Delphi Delays Move to Void Labor Contracts

Auto parts supplier Delphi Corp., citing progress in talks with labor unions and former parent General Motors Corp., said it would delay to the end of March the filing of papers in U.S. Bankruptcy Court to void its labor contracts and cut retiree benefits.

A filing, which could have come as early as Friday, would not immediately have led to a strike at Delphi by the United Auto Workers, which represents the majority of the company’s 34,000 hourly employees. But it was seen as heightening tensions in negotiations among the three parties as Delphi reorganizes under Chapter 11.

GM’s interest is two-pronged: Delphi’s parts production is crucial to its operations, and the automaker remains liable to cover benefit shortfalls for Delphi’s hourly workers under the terms of the parts company’s 1999 spinoff from GM.

GM shares fell 36 cents to $21.92.