Appaloosa’s response? Good riddance. Er...on second thought, could you find a replacement for that $1.7 billion you fronted? We don’t need you, but we still need that.

Appaloosa Management intends to forge ahead with a deal to acquire part of Delphi Corp., despite the likelihood of a key partner dropping out, in a test of private equity's interest in Detroit's auto industry.

The likely departure of private-equity firm Cerberus Capital Management from a group of investors looking to pay as much as $3.4 billion to restructure the auto supplier puts pressure on the United Auto Workers union to strike a deal that would draw investment to Delphi and save jobs. It also puts pressure on General Motors Corp., Delphi's former parent and biggest customer, to keep the company on a path to recovery.

Delphi, which yesterday said Cerberus was likely to pull out of the plan it had backed, will seek to replace the up to $1.7 billion Cerberus had committed to the proposal. For his part, Appaloosa founder David Tepper said in an interview he intends to remain part of a deal to own Delphi.

To read more about this story, go to [http://online.wsj.com/article/SB117699062245575541.html?mod=home_whats_news_us]

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