GENERAL Motors Corp should assume pension liabilities from Delphi Corp by the end of September or risk bearing additional costs from its bankrupt former auto-parts subsidiary, a United States agency said.
The Pension Benefit Guaranty Corp is concerned no resolution on a pension transfer seems imminent, according to a letter dated yesterday from agency director Charles E.F. Millard to GM President Fritz Henderson and Delphi Executive Chairman Steve Miller. Delphi had about US$3.3 billion in unfunded pension liabilities at the end of 2007, spokesman Lindsey Williams said.
"The bad news would be that the PBGC would be hit with a liability that would number in the billions," Millard told Bloomberg News. "The good news is that GM's plan is overfunded and there is a way to take that burden off Delphi's shoulders that could well allow it to survive."
GM, based in Detroit, has already agreed to assume US$1.5 billion in hourly worker pension benefits, according to court documents, and Delphi has said the two companies are negotiating an additional transfer that may aid the auto-parts maker's exit from bankruptcy.