An increasing number of diversified manufacturers are abandoning the U.S. automobile industry, selling off auto-related businesses and beefing up other parts of their portfolios, the Wall Street Journal reported today. The exposure to the domestic automotive business, battered by global competition that has already forced many auto-component-only producers such as Tower Automotive Inc. and Delphi Corp. into bankruptcy proceedings, has become too worrisome for these producers, while other parts of their businesses are more promising. For example, PPG Industries Inc., the Pittsburgh-based glass and coatings manufacturer, recently hung a “for sale” sign on its windshield business and electronics company Motorola Inc. agreed last year to sell its automotive sensor and control business for $1 billion to Germany’s Continental AG.

Dura Automotive Systems Inc. has won bankruptcy court approval to invite competing bids for its Atwood Mobile Products unit, which Insight Equity Holdings Inc. has offered to buy for $160.2 million, the Associated Press reported yesterday. The Rochester Hills, Mich., parts maker is auctioning the division, which manufactures parts for recreational vehicles, as part of its chapter 11 restructuring. Bankruptcy Judge Kevin Carey signed off Tuesday on the rules for an auction of the Atwood unit and scheduled an Aug. 15 hearing to review results of the sale. Competing bids are due Aug. 8 for an Aug. 14 auction.

Bankrupt auto parts company Dana Corp. defended a deal with its unions against objections from creditors, who have attacked a deal the company made with its workers’ union as ignoring the creditors’ interests, Bankruptcy Law360 reported yesterday. The objectors’ concerns stem primarily from a deal with the investment firm Centerbridge Capital Partners LLP, which will fund the deal with Dana’s workers. Two creditors, the investment firms Appaloosa Management LP and Brandes Investment Parters LP, have filed objections in bankruptcy court, along with the unsecured creditors’ committee. Dana said that the provisions of the deal with Centerbridge were consistent with market terms, and that Dana was not yielding any of its autonomy, either to Centerbridge or the unions, in making a deal. A hearing on the objections is scheduled for today.

A total of 153 people filed abuse claims against the Diocese of Davenport in bankruptcy court before last week’s bar date, the deadline for financial claims stemming from before the bankruptcy filing in October, the Quad City Times (Iowa) reported today. “We know this 153 number is not the total of all abuse claims,” said Michl Uhde, head of the creditors’ committee. “We want to make sure anyone who comes to the reality down the road will be taken care of.” The bar date was July 16, but Uhde said the plan is to set up a fund that will help victims have not yet come forward. The Diocese of Davenport, with about 100,000 members, has settled 43 cases for about $10 million. The diocese had a half-dozen lawsuits pending against it when it filed for bankruptcy; those plaintiffs are included in the list of 153 bankruptcy claimants, Uhde said.

A bankruptcy court has allowed diamond jewelry wholesaler LID Ltd. an extra 90 days to decide whether to keep its lease on its real property, but left the company’s motion to extend its exclusivity period hanging, Bankruptcy Law360 reported yesterday. LID asked the bankruptcy court for an extra 160 days to file its reorganization plan free of competing plans on June 28, three months after the company filed for chapter 11. The motion on the lease went unopposed and was granted in an order last Monday. The motion on the exclusivity period, however, remains undecided after a July 12 hearing on the extension was adjourned until July 25. The court has granted a “bridge” extension in the meantime through July 31.

A union representing more than 2,000 of Delphi Corp.’s hourly workers said Friday it has told the auto parts maker that it plans to terminate its contracts, a first step toward a possible strike in October, the Associated Press reported on Friday. The International Union of Electronic Workers-Communications Workers of America said the notification, delivered in a letter earlier this week, comes as contract talks have dragged on concerning job security, wages and benefits. On Thursday, Delphi made more progress toward emerging from bankruptcy protection when a court approved a settlement with the United Auto Workers. Delphi’s emergence from bankruptcy is expected before the end of the year. Deals still need to be reached with five other unions representing a total of about 3,000 workers, including the IUE-CWA.

Detroit’s unionized auto workers, under pressure from the Big Three auto makers, are signaling a willingness to consider proposals that would lift billions of dollars of retiree health-care obligations off the companies’ books, the Wall Street Journal reported today. The nitty-gritty details, however, pose significant and potentially costly hurdles. The United Auto Workers union has reportedly begun working with investment bank Lazard Ltd. to study scenarios for restructuring retiree health-care obligations at General Motors Corp., Ford Motor Co. and DaimlerChrysler AG’s Chrysler Group, though Lazard has yet to be officially hired. Blue-collar retiree health-care obligations will be a central issue as the union sits down today with Chrysler to formally begin bargaining toward a new master labor agreement. GM and Ford will begin talks on Monday. The current contracts based on the last agreement expire on Sept. 14.

The issue of medical costs will be at the center of the negotiations between the United Automobile Workers union and Detroit automakers as they begin their contract negotiations tomorrow, the New York Times reported today. The UAW is entering the contract talks with more retirees than active workers in its ranks the for first time in its 72-year history. Detroit automakers cover the health care expenses of both current and former union members — more than 1.1 million of them combined — and their dependents, which adds up to an annual bill of about $12 billion. So even as the struggling car companies try to restructure, announcing plans in the last two years to shed more than 80,000 workers, their health care bill continues to rise as those people age. The retirees, roughly 600,000 of them, risk seeing an erosion of benefits that they had assumed would be secure when their working days ended.

The failure of financier Carl Icahn’s effort to take over Lear Corp. in a deal that valued all of the auto-parts supplier at about $2.85 billion marks a significant wager by investors that Detroit is about to turn the corner, the Wall Street Journal reported today. From the moment the deal between Icahn and company management was announced in February, some top shareholders criticized the offer as insufficient. The original $36-a-share offer in February was a slim 3.8 percent premium over the previous day’s stock price. Last week, Icahn’s investment vehicle raised its bid to $37.25, but that wasn’t enough for disgruntled shareholders, who yesterday voted to reject the deal. Icahn and Lear’s management said the price was fair in light of the challenges facing suppliers and the chronic troubles of the big U.S. auto makers, DaimlerChrysler AG’s Chrysler Group — a majority stake of which is slated to be bought out by Cerberus Capital Management LP — Ford Motor Co. and General Motors Corp. The rejection marked only the eighth U.S. deal that shareholders have nixed in a vote since 2003, according to FactSet MergerMetrics, out of more than 1,000 deals requiring approval.

Bankrupt paper company Marcal Paper Mills Inc. has settled its dispute with the Pension Benefit Guaranty Corp. (PBGC), pledging to fully fund its pension plan in exchange for the government insurer agreeing to drop its administrative claims, Bankruptcy Law360 reported yesterday. The dispute dates back to early May when the PBGC filed a slew of claims against Marcal stemming from the company’s lack of payment regarding its pension plan. The government insurer accused Marcal of missing minimum funding contributions in the amount of $334,974 and failing to fund benefit liabilities in the amount of $6,440,110, according to court documents. Marcal objected to the claims and filed an order in June seeking to reduce the amount of PBGC’s claim to $0 in order to carry out distribution under the proposed reorganization plan, which the judge endorsed. Marcal vowed in its restructuring proposal to fully finance the pension plan, pay all required PBGC insurance premiums, and comply with all requirements of the Pension Plan and ERISA.