Delphi Announces Definitive Settlement With General Motors and Plan of Reorganization

Delphi Corp. (PINKSHEETS: DPHIQ) announced it has signed definitive settlement and restructuring agreements with General Motors Corp. (GM) and will file its proposed Joint Plan of Reorganization and related Disclosure Statement with the U.S. Bankruptcy Court for the Southern District of New York later today. Copies of these documents, which remain subject to approval by the Bankruptcy Court as part of the reorganization plan confirmation process, will be posted on www.delphidocket.com later today.

Delphi's comprehensive settlement with GM resolves all outstanding issues between Delphi and GM including: litigation commenced in March 2006, by Delphi, to terminate certain supply agreements with GM; all potential claims and disputes with GM arising out of the separation of Delphi from GM in 1999; certain post-separation claims and disputes between Delphi and GM; the proofs of claim filed by GM against Delphi in Delphi's Chapter 11 cases; GM's treatment under Delphi's proposed plan of reorganization; and various other legacy and ordinary course business matters between the companies.

The proposed Plan and related Disclosure Statement includes detailed information regarding the treatment of claims and interests, the company's five-year business plan, events leading up to and during Delphi's Chapter 11 cases, and an outline of the plan investor agreement and rights offering. Delphi's emergence timetable calls for the company to obtain exit financing commitments early in the fourth quarter of 2007.

The proposed plan also outlines Delphi's transformation centering around five core areas:


--  Agreements reached with all principal U.S. labor unions which create a
    competitive arena in which to conduct its business;

--  Agreements with General Motors outlining its financial support for
    certain legacy and labor costs and certain future business commitments to
    Delphi;

--  Delphi's future product portfolio and manufacturing footprint;

--  Delphi's planned transformation of its salaried workforce and progress
    in reducing SG&A to support its realigned portfolio; and

--  Delphi's plans to fund its U.S. defined benefit programs.

"Today's filing of Delphi's Plan of Reorganization and Disclosure Statement is a significant milestone for our company," said Rodney O'Neal, Delphi CEO and president. "Each of the numerous moving pieces to our transformation are coming together. In recent months, we have announced a new equity investment agreement with our Plan Investors and agreed on consensual distributions with our Statutory Committees for both our creditors and equity holders. Additionally, we completed our labor transformation with our six U.S. unions, settled complex multi-district ERISA and securities litigation, and finalized comprehensive settlement and restructuring agreements with GM. While achieving these transformation objectives, we also continued to support our customers and deliver operational excellence every step of the way. Delphi has made great progress toward its stated transformation goals and is intensely focused on completing the remaining items in order to successfully emerge from Chapter 11 as a more competitive technology leader."

PLAN OF REORGANIZATION FRAMEWORK

Delphi's plan of reorganization (the "Plan") is based upon a series of global settlements and compromises that involve every major group of constituents in Delphi's reorganization cases, including: Delphi, its principal U.S. labor unions, GM, the statutory creditors' and equity holders' committees appointed in Delphi's Chapter 11 cases and the lead plaintiffs in certain securities and ERISA multidistrict litigation.

The Plan provides for a recovery through a plan distribution of reorganized Delphi common stock and cash amounting to the principal amount of the claim plus accrued interest at a negotiated plan value for general unsecured creditors, and agreed upon distributions to other classes of creditors and interests. GM will receive a $2.7 billion cash distribution in satisfaction of certain of its claims against Delphi. As part of the settlement of the multidistrict ERISA and securities litigation, distributions will be made under three plan classes using plan currency in the same form, ratio, and treatment as what will be used to satisfy the holders of general unsecured claims. Allowed claims and interests for these three plan classes total $24.5 million for the ERISA plan class and a total of $204 million for the debt securities class and the common stock securities class. Holders of existing Delphi common stock will receive a distribution of shares of reorganized Delphi, five-year warrants exercisable to purchase shares of reorganized Delphi, and transferable and non-transferable subscription rights to purchase shares of reorganized Delphi.

The settlements embodied by the Plan feature rights offerings that will be conducted after confirmation of the Plan and which will allow Delphi's common stockholders, who are holders of shares of Delphi common stock as of the date when the Confirmation Hearing commences, to purchase, (i) through the exercise of transferable rights, approximately 28 percent of the common stock of reorganized Delphi at a discount to the negotiated plan value, and (ii) through the exercise of non-transferable rights, up to $572 million worth of shares (in the aggregate) of reorganized Delphi at the negotiated plan enterprise value price of $45.00 per share.