Delphi Corp., the world's largest auto-parts maker, announced on Thursday that a bankruptcy judge has agreed to postpone a hearing regarding the disposal of labor contracts until Friday, pending negotiations with unions and GM.

This was the second time the Michigan-based firm had asked for a delay. Negotiations between the three parties were continuing.

There was '˜productive activity' in the weeklong negotiations, commented Lindsey Williams, a spokesperson for Delphi.

"As long as there's productivity, we wanted to make the opportunity available to reach a consensual agreement, she said.

If no deal was reached before the court hearing on Friday, the firm could ask to scrap its labor contract in order to minimize costs. The union had previously warned that such action would lead to a strike that would shut down not only Delphi but also GM.

Delphi, like its former parent company, GM, is currently facing soaring health and pension costs. Currently Delphi is looking to step out of Chapter 11 bankruptcy protection by restructuring itself. It is currently looking to close or sell 21 unionized plants.

Michigan Software