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GM Board Votes to Complete Delphi Spinoff

April 13, 1999|Times Wire Services

General Motors Corp.'s board voted to distribute the auto maker's remaining stock in its big Delphi Automotive Systems Corp. parts unit to GM shareholders next month, completing the subsidiary's spinoff as an independent company. GM sold nearly 18% of Delphi in an initial public offering in February at $17 a share. The tax-free spinoff is expected to be completed with the distribution of 80% of Delphi shares worth $7.8 billion on May 28. The other 2% of shares are expected to fund a trust for retiree benefits. Delphi is the largest auto parts maker in the world. GM executives say the split will enable Delphi to expand its business and form relationships with other auto makers that have been reluctant to work with a supplier owned by a competitor. Delphi operates 168 manufacturing plants, 40 joint ventures and 27 technical centers in 36 countries. Its shares fell 13 cents to close at $17.31; GM rose $2.50 to close at $88.13. Both trade on the New York Stock Exchange.

Separately, GM said it will invest more than $400 million in its Arlington, Texas, truck-assembly plant to build a variety of new full-size trucks. GM said the move will create more than 500 new jobs and increase the plant's production capacity of about 130,000 vehicles by about 50%.

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