GM supplier to slash jobs as pay talks end

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The move could trigger strikes by 32,000 Delphi workers, halting production at GM and potentially pushing the world's biggest car maker towards bankruptcy.

Delphi also set out plans yesterday to cut 8,500 jobs, close or sell one-third of its factories, and slash its product range.

Delphi bosses and the United Auto Workers union pledged yesterday to keep talking, but without a deal Delphi said it intends to impose hourly wage cuts of 40 per cent. The bankruptcy court will also be asked to allow other changes to terms and conditions, plus factory closures and outsourcing. The key ruling could come in early June. The UAW said it would be "impossible to avoid a long strike" if Delphi imposed the wage cuts asked for.

The Detroit-based company says it cannot compete against low-cost producers in China, and its agonies have come to symbolise the decline of car production in the US rust belt.

GM is facing the toughest period in its 100-year history, as high costs and poor model design have seen it lose market share to Asian rivals. The car maker lost $8.6bn (£4.9bn) last year, and analysts fear a strike at Delphi - a former GM subsidiary - could be the last straw that collapses it into bankruptcy.

There were signs yesterday GM is days from selling a controlling stake in its finance arm, GMAC, to a consortium of private-equity bidders. The New York-based Cerberus Capital, backed by Citigroup, has bid about $11bn for a 51 per cent stake in the profitable business.