GM in serious talks to buy steering operations from former parts arm Delphi

GM is in serious talks with former parts arm Delphi to take back Delphi's Saginaw, MI-based steering operations, a person familiar with the negotiations said. The person, who asked not to be identified because the deal had not been announced publicly, said GM would buy back the factory because it makes critical parts for the troubled automaker. A deal can be announced as soon as Tuesday. Delphi was spun off as a separate company in 1999 by GM. The parts company went into bankruptcy protection in Oct. 2005 & has yet to emerge. The person says GM would likely hold the steering operation til it was able to sell it. GM COO Fritz Henderson said last month talks were under way for possible transfer of some of Troy-based Delphi's factories back to GM. The money-losing Delphi makes parts that are essential to GM's business, & GM has an option to take back factories in the original spinoff agreement. Henderson said in Feb. GM & Delphi must solve Delphi's financial woes & says GM's restructuring plan has money set aside for that purpose. But he said GM can take back an unstated number of plants & inject cash into Delphi, which has been unable to get financing to get out of bankruptcy protection. GM presented a survival plan Feb. 17 including closing 5 U.S. factories & cutting 47,000 jobs worldwide by the end of the year. The Detroit-based auto giant also asked the fed government for up to $30B in loans. GM's already received $13.4B in federal loan money. Delphi put the steering div. up for sale after identifying it as a non-core business & was in talks with Platinum Equity, a LA-based private-equity firm. But the deal apparently failed to materialize. The steering operation employs about 3,600 people, but the company announced about 800 layoffs last month. News of the possible deal with GM was reported Tuesday in The Wall Street Journal.