Sale will help GM focus on core manufacturing operations, analyst says
April 1, 2011
by Canadian Manufacturing Daily Staff
DETROIT—General Motors Company has sold its stake in Delphi Automotive LLP back to Delphi for $3.8 billion.
GM acquired the Class A Membership Interest in October 2009 in conjunction with the creation of Delphi.
The deal should help GM continue to focus on its core business, says Mike Wall, automotive analyst at HIS Consulting.
“GM will get a nice amount of cash for the sale, but it will also allow them to focus on their core vehicle manufacturing operations.”
Wall suggests the companies will continue to do business together. At the same time, Delphi is trying to diversify their customer base to continue cleaning up their financials.
“The time of the sale is really good for both sides,” says Wall. “GM will continue to be a sizeable customer and from a supply chain perspective, the sale won’t have significant impact on either companies.”
GM will book a gain of approximately $1.6 billion in the first quarter of 2011 related to the sale.