From financialwire.net

DETROIT -- A bankruptcy judged approved Delphi Corp's plan to buyout thousands of hourly employees Friday. Delphi will offer eligible employees $35,000 to retire as part of the company's plan to restructure its employment contracts.

The payments will come from General Motors, Delphi's former parent company, as part of a larger labor deal between the two companies. In that deal, GM, Delphi and the United Auto Workers agreed to offer the deal to 113,000 GM workers and 13,000 Delphi employees. An additional 5,000 Delphi workers could return to GM.

Delphi has been crippled by massive labor costs and the company has said the deal is critical to saving the business. The deal was announced in March but needed approval from the judge.

As part of the continuing process, Delphi asked a court to void its labor contracts last week. The UAW has threatened strike action if the contracts are thrown out.

The judge also approved a settlement between GM and Delphi's unsecured creditors who would challenge GM if the company sought payouts from restructured Delphi.

The creditors want GM to supply documents that explain any potential claims GM might make. GM has agreed to cooperate provided terms can be agreed regarding the scope of the request.

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