DETROIT (AP) – General Motors Corp. has been negotiating with the United Auto Workers for months in an attempt to lower its skyrocketing health care costs, but those talks could be jeopardized by Delphi Corp.’s bankruptcy, analysts said yesterday.

Uncertainty over GM’s situation caused its shares to fall $2.81, or nearly 10 percent, to close at $25.49 on the New York Stock Exchange.

Shares of auto supplier Delphi, which filed for bankruptcy on Saturday, fell 76 cents to close at 36 cents.

Standard & Poor’s Ratings Services also lowered GM’s credit rating deeper into “junk” status yesterday, from BB to BB-, a move that could make it harder for the struggling automaker to borrow money. GM, which is Delphi’s former parent and largest customer, will likely face price increases from Delphi and also is at risk of a disrupted supply if there is labor strife at Delphi plants, S&P said.

GM and the UAW have been talking since early spring about ways to cut GM’s annual health care bill, which will grow to $5.6 billion this year.

GM has suggested, among other measures, that hourly workers should pay as much for their health care as salaried workers do.

The UAW has said it will consider some ways to help GM but won’t reopen its contract with the automaker, which is scheduled to expire in September 2007.

Some industry analysts said the UAW may be less willing to make concessions to GM because the automaker didn’t prevent Delphi from declaring bankruptcy, putting Delphi’s 24,000 UAW-represented hourly workers at risk of massive pay cuts.

GM spun off Delphi in 1999 but left it with high labor costs, and Delphi is expected to seek cuts in wages and health care during its restructuring.

A recent letter to union members said Delphi wants to cut its $27 hourly wage by as much as 60 percent.

Delphi plans to ask its unions for changes in the contract later this month, and the bankruptcy court will have to approve those changes.

“GM’s apparent decision to let Delphi fail may signal a new hard line labor strategy at the company,” Merrill Lynch analyst John Casesa said in a note to investors.

“The company – purposefully or inadvertently – has put the union on notice.”

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