China Ministry of Commerce approves GM Delphi deal

SHANGHAI, Sept 29 (Reuters) – China’s Ministry of Commerce has approved plans by General Motors Co [GM.UL] to acquire certain assets of bankrupt Delphi Corp (DPHIQ.PK), Xinhua, the country’s official news agency, reported on Tuesday.
The approval came late on Monday and had conditions attached, including a ban on GM and Delphi on exchanging trade secrets on Delphi’s other Chinese customers.

GM is purchasing Delphi’s global steering business and four of the parts supplier’s plants it used to own in New York and Indiana.

Delphi hopes to exit bankruptcy at month’s end under control of its lenders, which have agreed to forgive nearly $3.5 billion in debt.

GM will assume more than $1 billion in Delphi obligations and waive $2 billion in claims. The automaker also plans to invest $1.75 billion and provide Delphi with loans.

A New York bankruptcy judge approved the Delphi sale in July, and a regulatory review continues.

Delphi has been in bankruptcy since 2005.

GM, Chrysler dealer closings to be audited by U.S. Treasury

WASHINGTON — The dealership terminations by General Motors Co. and Chrysler Group will be audited by the inspector general for the U.S. Treasury Department’s financial bailout, the inspector is expected to say in congressional testimony.
The audit will take place at the same time that dealer-rights negotiations are due to get under way, involving the two automakers, dealer groups, key lawmakers and the Obama administration’s auto task force.

A separate audit likely will be conducted of Treasury’s ownership and management of GM since the company emerged from bankruptcy.

Neil Barofsky, special inspector general for Treasury’s $700 billion Troubled Asset Relief Program, was appointed by President Barack Obama and confirmed by the Senate in December 2008.

In written testimony due to be delivered today before the Senate Banking Committee, Barofsky says his dealer audit “will examine the process used by General Motors and Chrysler to identify which automotive dealerships should be maintained or terminated.”

Many dealers have complained that the process was arbitrary and resulted in the closing of profitable stores.

GM and Chrysler say the terminations were carefully chosen to increase the automakers’ prospects for restoring profit after bankruptcy.

Not clear yet

Barofsky does not say when the audit will be completed or whether his findings will be shared with the congressionally sponsored negotiations.

Chrysler has terminated 789 dealerships, or a quarter of its U.S. total, and GM has begun shuttering 1,350 stores by October 2010.

The settlement talks, which have not begun, were intended as an alternative to legislation that would reverse the dealer terminations. The legislation passed the House but stalled in the Senate.

Barofsky also says he will audit “governance issues when the U.S. government has obtained a large ownership interest in a particular institution.” The government holds a 60 percent stake in GM after investing more than $50 billion.

Barofsky’s testimony doesn’t say specifically that he will audit GM.

This audit will examine “the extent of government involvement in management” of these companies, his testimony says. It also will look at risk management, monitoring, internal controls, performance measures and transparency at the companies.

Barofsky, a former federal prosecutor, can be fired only by the president, his spokeswoman said. He files periodic reports of his audits and investigations with Treasury Secretary Timothy Geithner and Congress.

Barofsky’s office has 86 employees and plans to grow to 160, according to his testimony.