formsc13d.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No. 8)

Delphi Corporation

(Name of Issuer)

Common Stock, $0.01 par value per share

(Title of Class of Securities)

247126105

(CUSIP Number)

Michael Colvin

Highland Capital Management, L.P.

Two Galleria Tower

13455 Noel Road, Suite 800

Dallas, Texas 75240

(972) 628-4100

(Name, Address and Telephone Number of Persons Authorized to Receive Notices and Communications)

August 27, 2008

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), (f) or (g), check the following box. o

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7(b) for other parties to whom copies are to be sent.

*The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

SCHEDULE 13D

CUSIP No. — 247126105

Page 2 of 11 Pages


1	NAMES OF REPORTING PERSONS S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Highland Capital Management, L.P., a Delaware limited partnership 75-2716725


2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
	(a) o
	(b) o

3	SEC USE ONLY



4	SOURCE OF FUNDS

	AF

5	CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)

	o

6	CITIZENSHIP OR PLACE OF ORGANIZATION

	Delaware
		7
			SOLE VOTING POWER

NUMBER OF			22,867,748
		8
SHARES			SHARED VOTING POWER
BENEFICIALLY
OWNED BY			2,228,767
		9
EACH			SOLE DISPOSITIVE POWER
REPORTING
PERSON			22,867,748
		10
WITH			SHARED DISPOSITIVE POWER

			2,228,767

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

	25,096,515

12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES

	o

13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

	4.4%

14	TYPE OF REPORTING PERSON

	PN, IA

CUSIP No. — 247126105

Page 3 of 11 Pages


1	NAMES OF REPORTING PERSONS S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Strand Advisors, Inc., a Delaware corporation 95-4440863


2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
	(a) o
	(b) o

3	SEC USE ONLY



4	SOURCE OF FUNDS

	AF

5	CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)

	o

6	CITIZENSHIP OR PLACE OF ORGANIZATION

	Delaware
		7
			SOLE VOTING POWER

NUMBER OF			22,867,748
		8
SHARES			SHARED VOTING POWER
BENEFICIALLY
OWNED BY			2,228,767
		9
EACH			SOLE DISPOSITIVE POWER
REPORTING
PERSON			22,867,748
		10
WITH			SHARED DISPOSITIVE POWER

			2,228,767

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

	25,096,515

12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES

	o

13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

	4.4%

14	TYPE OF REPORTING PERSON

	CO, HC

CUSIP No. — 247126105

Page 4 of 11 Pages


1	NAMES OF REPORTING PERSONS S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON James D. Dondero


2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
	(a) o
	(b) o

3	SEC USE ONLY



4	SOURCE OF FUNDS

	AF, PF

5	CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)

	o

6	CITIZENSHIP OR PLACE OF ORGANIZATION

	United States of America
		7
			SOLE VOTING POWER

NUMBER OF			27,662,248
		8
SHARES			SHARED VOTING POWER
BENEFICIALLY
OWNED BY			2,728,767
		9
EACH			SOLE DISPOSITIVE POWER
REPORTING
PERSON			27,662,248
		10
WITH			SHARED DISPOSITIVE POWER

			2,728,767

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

	30,391,015

12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES

	o

13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

	5.4%

14	TYPE OF REPORTING PERSON

	IN, HC

CUSIP No. — 247126105

Page 5 of 11 Pages

1	NAMES OF REPORTING PERSONS S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Highland Credit Strategies Fund, L.P., a Delaware trust (1) 20-4948762


2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
	(a) o
	(b) þ

3	SEC USE ONLY



4	SOURCE OF FUNDS

	WC

5	CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)

	o

6	CITIZENSHIP OR PLACE OF ORGANIZATION

	Delaware
		7
			SOLE VOTING POWER

NUMBER OF			0
		8
SHARES			SHARED VOTING POWER
BENEFICIALLY
OWNED BY			1,544,148
		9
EACH			SOLE DISPOSITIVE POWER
REPORTING
PERSON			0
		10
WITH			SHARED DISPOSITIVE POWER

			1,544,148

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

	1,544,148

12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES

	o

13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

	0.3%

14	TYPE OF REPORTING PERSON

	OO

(1) The Reporting Persons may be deemed to be the beneficial owners of the shares of the Issuer’s Common Stock beneficially owned by the other Reporting Persons. However, with respect to the matters described herein, no other Reporting Person may bind, obligate or take any action, directly or indirectly, on behalf of Highland Credit Strategies Fund, L.P. Therefore, Highland Credit Strategies Fund, L.P. expressly disclaims membership in a group with the other Reporting Persons.

CUSIP No. — 247126105

Page 6 of 11 Pages

1	NAMES OF REPORTING PERSONS S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Highland Multi-Strategy Onshore Master SubFund, L.L.C., a Delaware limited liability company 20-5237162


2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
	(a) o
	(b) o

3	SEC USE ONLY



4	SOURCE OF FUNDS

	WC

5	CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)

	o

6	CITIZENSHIP OR PLACE OF ORGANIZATION

	Delaware
		7
			SOLE VOTING POWER

NUMBER OF			0
		8
SHARES			SHARED VOTING POWER
BENEFICIALLY
OWNED BY			684,619
		9
EACH			SOLE DISPOSITIVE POWER
REPORTING
PERSON			0
		10
WITH			SHARED DISPOSITIVE POWER

			684,619

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

	684,619

12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES

	o

13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

	0.1%

14	TYPE OF REPORTING PERSON

	OO

CUSIP No. — 247126105

Page 7 of 11 Pages

1	NAMES OF REPORTING PERSONS S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Highland Multi-Strategy Master Fund, L.P., a Bermuda limited partnership


2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
	(a) o
	(b) o

3	SEC USE ONLY



4	SOURCE OF FUNDS

	WC

5	CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)

	o

6	CITIZENSHIP OR PLACE OF ORGANIZATION

	Bermuda
		7
			SOLE VOTING POWER

NUMBER OF			0
		8
SHARES			SHARED VOTING POWER
BENEFICIALLY
OWNED BY			684,619
		9
EACH			SOLE DISPOSITIVE POWER
REPORTING
PERSON			0
		10
WITH			SHARED DISPOSITIVE POWER

			684,619

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

	684,619

12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES

	o

13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

	0.1%

14	TYPE OF REPORTING PERSON

	PN, HC

CUSIP No. — 247126105

Page 8 of 11 Pages

This Amendment No. 8 to Schedule 13D relates to the common stock, par value $0.01 per share (“ Common Stock ”), of Delphi Corporation, a Delaware corporation (the “ Issuer ”), and is being filed on behalf of (i) Highland Capital Management, L.P., a Delaware limited partnership (“ Highland Capital ”); (ii) Strand Advisors, Inc., a Delaware corporation (“ Strand ”); (iii) James D. Dondero; (iv) Highland Credit Strategies Fund, L.P., a Delaware trust (“ HCF ”); (v) Highland Multi-Strategy Onshore Master SubFund, L.L.C., a Delaware limited liability company (“ SubFund ”); and (vi) Highland Multi-Strategy Master Fund, L.P., a Bermuda limited partnership (“ MasterFund ” and, collectively, the “ Reporting Persons ”), to amend the Schedule 13D that was originally filed with the Securities and Exchange Commission (the “ Commission ”) on December 22, 2006 (the “ Original 13D ”), as amended by Amendment No. 1 to Schedule 13D filed with the Commission on January 5, 2007 (the “ 13D First Amendment ”), as amended by Amendment No. 2 to Schedule 13D filed with the Commission on January 12, 2007 (the “ 13D Second Amendment ”), as amended by Amendment No. 3 to Schedule 13D filed with the Commission on April 20, 2007 (the “ 13D Third Amendment ”), as amended by Amendment No. 4 to Schedule 13D filed with the Commission on May 31, 2007 (the “ 13D Fourth Amendment ”), as amended by Amendment No. 5 to Schedule 13D filed with the Commission on June 13, 2007 (the “ 13D Fifth Amendment ”), and as amended by Amendment No. 6 to Schedule 13D filed with the Commission on July 19, 2007 (the “ 13D Sixth Amendment ” and, collectively, the “ Highland 13D ”), and as amended by Amendment No.7 to Schedule 13D filed with the Commission on October 4, 2007 (the “13D Seventh Amendment”), and as amended by Amendment No.8 to Schedule 13D filed with the Commission on September 5, 2008, collectively, (the “13D Eight Amendment” and “Highland 13D”).

Except as set forth below, all previous Items are unchanged. Capitalized terms used herein which are not defined herein have the meanings given to them in the Highland 13D.

Item 4. Purpose of Transaction.

Item 4 is amended to include the following letter attached hereto as Exhibit 16, which is incorporated herein by reference in its entirety.

Item 5. Interest in Securities of the Issuer.

Item 5 is amended and restated in its entirety as follows:

(a) As of August 27, 2008, (i) Highland Capital may be deemed to beneficially own 25,096,515 shares of Common Stock, which represents approximately 4.44% 1,2 of the outstanding Common Stock; (ii) Strand may be deemed to beneficially own 25,096,515 shares of Common Stock, which represents approximately 4.44% 1,2 of the outstanding Common Stock; (iii) James D. Dondero may be deemed to beneficially own 30,391,015 shares of Common Stock, which represents 5.38% 1 of the outstanding Common Stock; (iv) HCF may be deemed to beneficially own 1,544,148 shares of Common Stock, which represents approximately 0.27% 1 of the outstanding Common Stock; (v) SubFund may be deemed to beneficially own 684,619 shares of Common Stock, which represents approximately 0.12% 1 of the outstanding Common Stock; and (vi) MasterFund may be deemed to beneficially own 684,619 shares of Common Stock, which represents approximately 0.12% 1 of the outstanding Common Stock.

(b)	Sole		Shared		Sole		Shared
	Voting		Voting		Dispositive		Dispositive
	Power		Power		Power		Power

Highland Capital Management, L.P.		22,867,748		2,228,767		22,867,748		2,228,767
Strand Advisors, Inc.		22,867,748		2,228,767		22,867,748		2,228,767
James D. Dondero		27,662,248		2,728,767		27,662,248		2,728,767
Highland Credit Strategies Fund		0		1,544,148		0		1,544,148
Highland Multi-Strategy Onshore Master SubFund, L.L.C.		0		684,619		0		684,619
Highland Multi-Strategy Master Fund, L.P.		0		684,619		0		684,619

(d) Not applicable.

(e) Not applicable



	1	This calculation is based on 564,635,299 shares of the Issuer’s Common Stock outstanding as of June 30, 2008, as disclosed in the Issuer’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2008.

	2	Highland Capital and certain of its affiliates and related entities collectively hold approximately 5.38% of Issuer’s Common Stock.

Item 7. Material to be Filed as Exhibits.

Item 7 is amended to include the following:

Exhibit 16 Letter from Highland Capital Management, L.P., dated August 27, 2008, to the Board of Directors of Delphi Corporation.

CUSIP No. — 247126105

Page 9 of 11 Pages

SIGNATURES

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Date: September 5, 2008

Highland Credit Strategies Fund, L.P.

By:	/s/ James Dondero
	Name:	James Dondero
	Title:	President


Highland Capital Management, L.P.
By:	Strand Advisors, Inc., its general partner
By:	/s/ James Dondero
	Name:	James Dondero
	Title:	President


Strand Advisors, Inc.
By:	/s/ James Dondero
	Name:	James Dondero
	Title:	President


James Dondero

/s/ James Dondero

CUSIP No. — 247126105

Page 10 of 11 Pages

Highland Multi-Strategy Onshore Master SubFund, L.L.C.

By:	Highland Multi-Strategy Master Fund, L.P., its managing member
By:	Highland Multi-Strategy Fund GP, L.P., its general partner
By:	Highland Multi-Strategy Fund GP, L.L.C., its general partner
By:	Highland Capital Management, L.P., its sole member
By:	Strand Advisors, Inc., its general partner

	By:	/s/ James Dondero

		Name: James Dondero
		Title: President


Highland Multi-Strategy Master Fund, L.P.

By:	Highland Multi-Strategy Fund GP, L.P., its general partner
By:	Highland Multi-Strategy Fund GP, L.L.C., its general partner
By:	Highland Capital Management, L.P., its sole member
By:	Strand Advisors, Inc., its general partner

	By:	/s/ James Dondero

		Name: James Dondero
		Title: President

CUSIP No. — 247126105

Page11 of 11 Pages

EXHIBITS


Exhibit 1 .		Letter from Highland Capital Management, L.P., dated December 21, 2006, to the Board of Directors of Delphi Corporation ( Exhibit 1 to Schedule 13D filed with the Securities and Exchange Commission on December 22, 2006 and incorporated by reference herein).

Exhibit 2		Joint Filing Agreement, dated as of December 22, 2006, by and between the Reporting Persons ( Exhibit 2 to Schedule 13D filed with the Securities and Exchange Commission on December 22, 2006 and incorporated by reference herein).

Exhibit 3		Letter from Highland Capital Management, L.P., dated December 29, 2006, to the Board of Directors of Delphi Corporation ( Exhibit 3 to Amendment No. 1 to Schedule 13D filed with the Securities and Exchange Commission on January 5, 2007 and incorporated by reference herein).

Exhibit 4		Letter from Highland Capital Management, L.P., dated January 9, 2007, to the Board of Directors of Delphi Corporation ( Exhibit 4 to Amendment No. 2 to Schedule 13D filed with the Securities and Exchange Commission on January 12, 2007 and incorporated by reference herein).

Exhibit 5		Letter from Highland Capital Management, L.P., dated April 18, 2007, to the Board of Directors of Delphi Corporation ( Exhibit 5 to Amendment No. 3 to Schedule 13D filed with the Securities and Exchange Commission on April 20, 2007 and incorporated by reference herein).

Exhibit 6		Letter from Highland Capital Management, L.P., dated April 19, 2007, to David M. Sherbin, Vice President, General Counsel and Chief Compliance Officer of Delphi Corporation ( Exhibit 6 to Amendment No. 3 to Schedule 13D filed with the Securities and Exchange Commission on April 20, 2007 and incorporated by reference herein).

Exhibit 7		Confidential Information, Standstill and Nondisclosure Agreement, dated May 25, 2007, between Highland Capital Management, L.P. and Delphi Corporation ( Exhibit 7 to Amendment No. 4 to Schedule 13D filed with the Securities and Exchange Commission on May 31, 2007 and incorporated by reference herein).

Exhibit 8		Diligence Protocol Agreement, dated May 25, 2007, by and between Pardus European Special Opportunities Master Fund L.P., Highland Capital Management, L.P. and Brandes Investment Partners, L.P. ( Exhibit 8 to Amendment No. 4 to Schedule 13D filed with the Securities and Exchange Commission on May 31, 2007 and incorporated by reference herein).

Exhibit 9		Amended and Restated Confidential Information, Standstill and Nondisclosure Agreement, dated June 11, 2007, between Highland Capital Management, L.P. and Delphi Corporation ( Exhibit 9 to Amendment No. 5 to Schedule 13D filed with the Securities and Exchange Commission on June 13, 2007 and incorporated by reference herein).

Exhibit 10		Proposal Letter dated July 17, 2007 from Highland Capital Management, L.P. and Highland-Delphi Acquisition Holdings, LLC to Delphi Corporation ( Exhibit 10 to Amendment No. 6 to Schedule 13D filed with the Securities and Exchange Commission on July 19, 2007 and incorporated by reference herein).

Exhibit 11		Delphi-Highland Equity Purchase and Commitment Agreement dated July 17, 2007 (( Exhibit 11 to Amendment No. 6 to Schedule 13D filed with the Securities and Exchange Commission on July 19, 2007 and incorporated by reference herein).

Exhibit 12		Commitment Letter dated July 17, 2007 from Highland Credit Opportunities CDO GP, L.P. ( Exhibit 12 to Amendment No. 6 to Schedule 13D filed with the Securities and Exchange Commission on July 19, 2007 and incorporated by reference herein).

Exhibit 13		Commitment Letter dated July 17, 2007 from Highland Credit Strategies Master Fund, L.P. ( Exhibit 13 to Amendment No. 6 to Schedule 13D filed with the Securities and Exchange Commission on July 19, 2007 and incorporated by reference herein).

Exhibit 14		Commitment Letter dated July 17, 2007 from Highland Crusader Offshore Partners, L.P. ( Exhibit 14 to Amendment No. 6 to Schedule 13D filed with the Securities and Exchange Commission on July 19, 2007 and incorporated by reference herein).

Exhibit 15		Commitment Letter dated July 17, 2007 from Highland Special Opportunities Holding Company ( Exhibit 15 to Amendment No. 6 to Schedule 13D filed with the Securities and Exchange Commission on July 19, 2007 and incorporated by reference herein)

Exhibit 16		Letter from Highland Capital Management, L.P., dated August 27, 2008, to the Board of Directors of Delphi Corporation ( Exhibit 16 to Schedule 13D filed with the Securities and Exchange Commission on September 5, 2008, and incorporated by reference herein).

August 27, 2008

Robert S. Miller, Director

Rodney O'Neal, Director

John D. Opie, Director

Oscar De Paula Bernardes Neto, Director

John D. Englar, Director

David N. Farr, Director

Raymond J. Milchovich, Director

Craig G. Naylor, Director

John H. Walker, Director

Martin E. Welch, Director

c/o Delphi Corporation

Attention: Corporate Secretary

M/C 483-400-603

5725 Delphi Drive

Troy, Michigan 48098

Re:

Chapter 11 Reorganization of Delphi Corporation and

Subsidiaries (the "Reorganization Cases")

Gentlemen:

This letter is directed to each of you in your capacity as a member of the Board of Directors (the "Board") of Delphi Corporation ("Delphi").

The undersigned collectively hold approximately $495 million in principal amount of Delphi senior notes (the "Senior Notes"). As creditors of Delphi, we expect that the Board will direct the affairs of Delphi in a manner consistent with its fiduciary duties to the holders of Senior Notes ("Senior Noteholders") and other creditors of Delphi. Regrettably, the Board has not done so.

Chapter 11 provides a debtor-in-possession the opportunity, and the obligation as the fiduciary for the estate, to remedy or terminate unprofitable business operations in order to maximize the value available to its creditor constituencies. Delphi has utterly failed to take such actions in connection with the Reorganization Cases.

While Delphi's global operations (largely conducted through subsidiaries that are not debtors in the Reorganization Cases ("Debtors")) are profitable, its North American operations (largely conducted through subsidiaries that are Debtors) continue to lose staggering sums of money, and drag down the rest of the business. In the three months ended June 30, 2008 alone, the Debtors' loss from continuing operations was more than $500 million. Not only do the North American operations operate at a loss, but they also burn cash at an alarming rate. More than $960 million in net cash has been used to fund the operating activities of the Debtors in just the first six months of 2008.

Rather than taking immediate action to terminate the losses and stop the hemorrhaging of cash, Delphi proposes instead to seek to incur an administrative priority debt to General Motors Corporation ("GM") to cover losses generated during the period after Delphi's plan of reorganization ("Plan") failed to become effective. Although these losses are clearly attributable to the North American operations, Delphi proposes to place this burden on all of the Debtors, thereby harming the creditors of Delphi, whose profitable, non-Debtor foreign subsidiaries are already subsidizing the money-losing North American operations. By granting GM an administrative priority claim that could be asserted against all of the Debtors, including Delphi, Delphi is effectively proposing to allow the equity value in its foreign subsidiaries to be stripped for the benefit of its failing North American subsidiary operations, which may have no equity value at all. Thus, Delphi proposes to effectively shift assets improperly from the corporations (and/or their stakeholders) that conduct Delphi's global operations to those that conduct its North American operations, and effectively shift the North American liabilities to the global operations (and/or their stakeholders).

The real beneficiary of Delphi's willingness to endure the ongoing losses by improperly shifting the burden in this manner is, of course, GM. With the Plan incapable of being consummated, and the GM Global Settlement Agreement ("GSA") and GM Master Restructuring Agreement ("MRA") thus not being implemented, GM continues to reap the benefit of the status quo. The Debtors have acknowledged (in their motion to reject certain executory contracts with GM) that they supply GM with products at unprofitable pricing levels that result in substantial operating losses for the North American business operations and that they "have a duty to their creditors and other stakeholders to stop supplying GM at a loss and to renegotiate fair and reasonable terms under which they will produce parts for GM." Nevertheless, Delphi proposes to continue doing just that – to continue performance under contracts that it has already acknowledged as moneylosers – and to saddle the stakeholders of the healthy global operations with the resulting loss. This defeats one of the fundamental purposes of Chapter 11, which is to afford debtors an opportunity to exit unprofitable businesses and contracts.

Delphi's continued willingness to operate a money-losing business that burns cash for the benefit of GM is beyond comprehension. Delphi is now proposing to incur even greater administrative claims payable to GM in order to sink more cash into this unprofitable business model, for GM’s benefit. The Debtors should not be layering on increasing amounts of debt to pay for losses from which only GM benefits. Rather, the Debtors should be exploring other avenues to restructure their North American operations and should be considering all options, including, (i) union negotiations, (ii) exiting unprofitable businesses and rejecting unprofitable contracts, and (iii) negotiating agreements with their customers, including GM, to increase their pricing to rational levels which would allow their North American operations to operate on an economic basis.

Notwithstanding the fact that it is GM, rather than the Debtors or their estates, that benefits most from the proposed arrangement with GM, GM bears little of the risk associated therewith. As discussed above, GM gets immediate benefits in terms of continued pricing levels at which the Debtors are wildly unprofitable. However, under the GM arrangement, those pricing benefits do not get applied to, or set off against, the advances made by GM. Rather, the Debtors would get "credit" against the advances for amounts paid by GM or its affiliates to or for the benefit of the Debtors under the GSA and the MRA, but only following the effectiveness of those agreements. Thus, unless the Plan (including the GSA and MRA) actually becomes effective, the Debtors get no credit, or benefit, for continuing to provide GM with supplies under a pricing structure that does not cover the Debtors' own costs. Moreover, even if GM were not already getting repaid in the form of pricing benefits, the GM Arrangement further provides for GM to receive the protection of having the Debtors' repayment obligations accorded administrative expense priority. Even more, this administrative claim is against all Debtors, not just those that arguably benefit from the availability of additional liquidity to fund more losses.

Furthermore, GM is entitled to payment of this administrative priority expense claim upon the applicable termination date provided for in the proposed GM arrangement. It is apparent from the proposal that GM is attempting to grab even more control in the Reorganization Cases. First, the proposed additional financing of $300 million is expressly conditioned on the Debtors' filing a plan and disclosure statement that are reasonably satisfactory to GM. Second, in the event that such a plan and disclosure statement are not filed by October 31, 2008, any such amounts that may nevertheless have been advanced become immediately due and payable. This effectively gives GM veto rights on any plan of reorganization that the Debtors might file; taken together with the Debtors' plan exclusivity, this effectively gives GM control of the plan process. Third, should the Debtors be able to jump this hurdle, then the GM arrangement would terminate by no later than December 31, 2008 unless there are further extensions of the debtor in possession financing agreement ("DIP") – again, on terms that are acceptable to GM. The Debtors are on a short-leash – their access to the "liquidity" offered by GM is but for a few short months and is expressly dependent on GM's pre-approval of major steps in these bankruptcy cases. In effect, the Board apparently proposes to abdicate de facto control over the plan process and the DIP extension to GM.

The proposed arrangement with GM does nothing more than perpetuate an ongoing erosion of value, and is neither a solution, nor even a step to a solution. It is essential that Delphi now take the perhaps difficult, but undeniably necessary, steps to restore this business to profitability. This is a key, threshold undertaking that must precede the filing and confirmation of a plan of reorganization, because of the dramatic effect these actions will have on the form and structure of Delphi's emergence plan and exit financing. Delphi's current attempts to find new outside investors, or even current stakeholders, to "backstop" a rights offering as a cornerstone of this plan process is inherently expensive and, as shown by the outcome on April 5th, extremely risky. Moreover, these efforts put the proverbial cart before the proverbial horse; the business model that continues to burn cash and produce outsized losses, and drains the profitable, cash-flow generating foreign operations to prop up the money-losing, cash-draining U.S. operations, needs to be corrected before Delphi asks current stakeholders to put in more money or dilutes them by seeking outside investors, not after. Delphi's historical, and current singular focus on searching for new investment in its current depressed operating state is troubling given the fiduciary duty of this board to maximize value and recoveries for its stakeholders (of which their Senior Noteholders are a large percentage). We believe the Board's current approach is counter-productive and, as history has demonstrated, dangerous, and would vigorously oppose it. Delphi should first be focusing on fixing its business once and for all by either stopping the losses from its North American operations or terminating those operations without delay.

	Sincerely,

		CR Intrinsic Investors, LLC
		(and/or certain funds managed thereby)
		72 Cummings Point Road
		Stamford, Connecticut 06902


	By:	/s/ Andre Zeitoun

		and

		Highland Capital Management, L.P.
		(and/or certain funds managed thereby)
		13455 Noel Road, Suite 700
		Dallas, Texas 75240


	By:	/s/ James Dondero

cc:	John Sheehan

John Wm. Butler, Jr.