With sales off nearly 20% in March, GM (NYSE: GM) does not need any more headaches. But, it got one today. The company’s former parts operation, Delphi, is in the process of coming out of Chapter 11. GM was to provide a portion of the financing. Today, the lead investor, Appaloosa Management, walked away.
Appaloosa said that GM’s investment in the project would give it too much influence over Delphi management.
GM may have to take on more of a financial burden to help Delphi to a new exit program.
Investors took it badly, driving down GM shares almost 4% to $20.82.
GM can’t afford many more months like this one.
Douglas A. McIntyre