Naming itself Nexteer Automotive, Delphi's former steering division is trying to distinguish itself from GM, and will likely be sold.
Analysts say they expect that GM won't keep Delphi's former steering division for the long term.
The automaker told its other suppliers this week that GM would "reevaluate its ownership of the steering business as industry conditions evolve."
But for now, the steering systems that the former Delphi division makes are so critical to GM's production that the automaker acquired the business Tuesday. GM had spun off the steering business with Delphi in 1999.
GM's relationship with these operations illustrates how the U.S. auto industry's upheaval has forced automakers to take a larger role in keeping suppliers stable so production stays on track.
GM bought back four other former Delphi plants after agreeing to take on $600 million in Delphi's debt. GM also pledged as much as $210 million in financial support to American Axle Manufacturing Inc. to help the company stay out of bankruptcy. In return, GM can buy up to 19.9% of the axle maker's stock at a discount.
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Despite its new automaker owner, Nexteer said it operates as a separate entity. The company posted $2.1 billion in revenue last year. It has 6,236 employees at 15 plants worldwide, including 2,859 employees at its plants and headquarters in Saginaw.
Nexteer President Bob Remenar said during the second half of 2009, the business will be profitable.
"Our plan going forward is that the business is profitable and generates cash to cover our spending needs," he said.
Stressing a distinction between Nexteer and GM may be essential as the firm tries to win new customers, who may be skeptical of buying parts from a supplier owned by a competitor. Read more on http://www.freep.com
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