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GM's Delphi to Sell 3 Businesses to Prepare for Stock Offering

September 19, 1997| From Bloomberg News

General Motors Corp.'s Delphi parts unit plans to sell three unprofitable businesses employing 11,300 people, or 6.3% of its work force, to focus on profitable products and spruce itself up for a public stock offering.

The businesses to be sold, which make seats, springs and lights, have 15 plants and engineering centers in North America, Europe and South Africa and had $2 billion in sales last year. Delphi, with $26 billion in annual sales and 178,000 employees, is the world's largest maker of auto parts.

Analysts had expected Delphi to shed its lackluster product lines as it prepares for an initial public offering, expected as early as next year, and as it shifts its focus from individual parts to the more comprehensive component systems increasingly demanded by GM and other auto makers.

"They need to be able to put their money behind products they want to stick with," said Craig Cather, an auto industry consultant with CSM Corp. in Lansing, Mich.

Sale proceeds aren't likely to be significant, analysts said. The company last year sold four North American plants, with annual sales of $1 billion, to closely held Peregrine Corp. for less than $80 million.

The sales would continue Delphi's product cutbacks. Between 1991 and 1996, it cut its product line to 167 items from 210.

GM shares rose 31 cents to close at $68.69 on the New York Stock Exchange.

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