Delphi may soon be gone in name, but the factory and its employees will remain in business.
Hephaestus Holdings Inc., has been given the go-ahead by a U.S. Bankruptcy Court in Southern New York to purchase Delphi, according to a high-ranking union official who works for Delphi. HHI-owned Kyklos, Inc., will be the official owner of the company.
A source familiar with the negotiations said Kyklos will pay $20 million in cash for the business. Closing of the deal should come before April 30.
"Obviously we are happy the process is over," the union official said. "There is a lot of tension because we don't know what is in store yet."
Representatives from HHI met with officials from UAW Local 913 within the last couple of weeks, according to the union source.
"We only sat down with the (new) owners for about an hour," he said. "We really didn't get an impression."
Neither HHI nor Kyklos officials returned calls seeking comment. Delphi also did not return a call for comment.
Last month, Delphi Corp. entered into an $18.7 million asset purchase agreement with HHI's indirect, wholly-owned subsidiary, Kyklos. The agreement included the acquisition of the Perkins Township facility and the wheel bearings plant's inventory, intellectual property, machinery and equipment. Kyklos will also offer employment to all the plant's employees and expects to assume all of the customer and supplier contracts.
Delphi's bearing business is the leading producer of Gen III wheel bearings in North America and the primary supplier of this product to General Motors Corp.
News that the factory would remain open pleased Mark Litten, executive director for the Erie County Economic Development Corp.
"From a big picture this is great for the community," Litten said. "Some thought this plant would be closed by now. As a community I think we weathered a storm...the plant will be open and continue to be open, it will just have another sign in front of it."
The plant employs about 700 hourly employees.
Delphi filed for Chapter 11 bankruptcy in 2005.