Cerberus Dropping Out Of Delphi Talks?

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Cerberus Capital Management is pulling out of talks to buy bankrupt autoparts maker Delphi Corp, Jalopnik’s Ray Wert reports this morning. The private equity group is still interested in buying Delphi but not until after it emerges from Chapter 11. Earlier this week it had been reported that talks between Cerberus and Delphi’s management had hit a “snag.” Delphi has been having trouble with the United Auto Workers union, which earlier this week announced it was rejecting plans for wage cuts for new workers at the company.
From Jalopnik:

That's right, the private money-making fund is withdrawing from a deal to buy Delphi Corp. and help pull the little bugger out of Chapter 11 reorganization. Delphi claims Cerberus is pulling out over differences over Delphi's future value. Cerberus claims -- well, they ain't claiming anything other than that they might still play with Delphi when it finally does leave Chapter 11 -- but one wonders whether the deal's being killed because of an inability for Cerberus to get concessions out of the UAW, inflexibility and ineffectiveness of management or because they're saving their bank for the big prize -- the Chrysler Group. Who knows?

A quick conversation over text-messaging to a DealBreaker source in who is familiar with the Chrysler buyout bidding agrees with Jalopnik’s speculation—Cerberus might not want to rile the union with tough talk at Delphi at a time when it is aiming to buy Chrysler, a deal that will most likely require union support. The UAW has already been flexing its muscles in sale of Chrysler, suggesting that perhaps Chrysler should remain under the Daimler umbrella.
Update:Delphi confirms that Cerberus is out.
The Delphi Rhythm Method: Cerberus Pulls Out Early [Jalopnik]

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