GM will use $1.1 billion to buy Delphi's global steering business and four parts manufacturing facilities, ensuring a steady stream of critical parts to the automaker. Delphi produces about 10 percent of the parts used in GM's global manufacturing, and its components go into nearly all of GM's North American production lines.

GM has received more than $50 billion in government aid and the automaker will draw on the proceeds of $16.4 billion that was deposited in escrow by the government. Delphi recently emerged from bankruptcy and GM agreed to buy an equity stake in the parts supplier as part of the deal.

The U.S. government owns a 61 percent stake in GM after it was forced into bankruptcy and reorganized. GM must receive approval from the government to use its federal aid.

Troy, Mich.-based Delphi, once GM's parts division, was spun off in 1999 as a separate company but filed for Chapter 11 in October 2005. Delphi emerged from bankruptcy protection on Oct. 6 as a new company after completing a deal with its lenders and receiving a promise for billions in loans from GM.

Under the deal, GM will take back some of Delphi's businesses, including its Saginaw, Mich., global steering operations and parts manufacturing facilities in Lockport and Rochester, N.Y., Wyoming, Mich., and Kokomo, Ind.

AP Auto Writer Tom Krisher in Detroit contributed to this report.

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