|
Browse by Tags
All Tags » bailout ( RSS)
-
|
Filed under: Government/Legal , GM General Motors submitted a restructuring plan on February 17 that included 47,000 job cuts, 14 plant closings by 2012 and the sale, dismantling, or shrinking of four brands. It sounds like a big remodeling job, unless you're a GM bondholder. In a letter sent to President Obama's automotive task force, GM's debt holders feel that the plan may rely too heavily on the ability for the economy and car sales to make a quick turnaround. The letter states that bond holders "do not know if the plan would, in fact, keep the company out of bankruptcy," and that it relies too heavily on auto sales bouncing back to pre-recession levels. Bondholder discontent isn't surprising here, considering the government loan conditions mandate GM exchanges two-thirds of its $27 billion in debt into liquidity. If GM doesn't hit its target, the automaker would be forced to give back $13.4 billion in government loans, guaranteeing chapter 11 bankruptcy...
|
-
|
Filed under: Car Buying , Chrysler, LLC. , GM General Motors and Chrysler have already received a combined $17.4 billion in government loans to keep them from insolvency and bankruptcy. The argument against bankruptcy has been that nobody wants to buy a new car or truck from an automaker that might not be around to honor its warranty. A new study by CNW Research, however, shows that the mere talk of bankruptcy has been enough to scare buyers away. The study, which polled 40,000 car buyers during January and February, reveals that 12% fewer customers are interested in GM products versus a year ago. Chrysler's decline is far more steep, as 33% are no longer considering one of its products. With GM and especially Chrysler experiencing these severe drops in consideration, other automakers have seen an increase in interest. Ford, which has been able to avoid asking for federal assistance thus far, is enjoying a 12% increase in consideration from buyers polled. Honda is faring even better...
|
-
|
Filed under: GM , Canada Reuters reports that the Canadian Auto Workers leadership and General Motors Canada have agreed on a set of union concessions that, if approved by CAW members, could clear the way for both the Canadian federal and Ontario local governments to furnish the cash-starved automaker with billions more in bailout dollars. According to Reuters, the union has agreed to swallow a wage freeze through 2012, reduced vacation time, and higher co-pays on their benefits plans. These changes would come on top of proposed pay reductions for both executives and regular salaried workers, plus benefits cuts for the latter. GM hopes that the combined white-and blue-collar savings will be enough to convince Canadian officials to open up the coffers. For its part, the CAW says it'll use the GM negotiations as a model for how it'll deal with the other automakers seeking similar concessions. The Canadian developments come after a week in which the big story was GM's auditors'...
|
-
|
Filed under: Government/Legal , Chrysler, LLC. , GM During his state of the economy speech on Capitol Hill, President Obama was passionate in stating his commitment to saving the domestic auto industry. While domestic automakers have the President's support, the general public may be less receptive to more government loans. A recent USA Today poll taken in the days before President Obama's speech shows that only 25% of the 1,013 Americans polled are now in favor of additional assistance. That's down from 61% in December just before the government agreed to $17.4 billion in loans to General Motors and Chrysler. While the majority of people surveyed are not in favor of additional government loans, 51% believe that all three automakers will survive this tumultuous time. Without additional loans, GM and Chrysler say that they will be forced to declare bankruptcy, which both caution is a very risky endeavor. While Chrysler and GM are getting the lion's share of attention, Ford's...
|
-
|
Filed under: Government/Legal , Chrysler, LLC. , GM General Motors may have put a merger with Chrysler in its rear view mirror, but the Pentastar apparently thinks a tie-up might still be a good idea. Chrysler called a potential pairing with the General the "best option" for the Auburn Hills, MI-based automaker, saying that it would reap five times the benefit of a Fiat merger. Chrysler pointed out in its viability report to the U.S. government that the two companies would have more purchasing power, the deal would generate $36 billion in cash and another $40 billion in operating earnings. Barclays analyst Brian Johnson points out that Chrysler is pushing for industry consolidation, saying that Chrysler feels a GM merger "would create more value than a standalone Chrysler or Fiat alliance." That has to make Fiat feel all warm and fuzzy inside. Tennessee Senator and domestic automaker critic Bob Corker agrees that a merger is in Chrysler's best interests, but questions...
|
-
|
Filed under: Government/Legal , Chrysler, LLC. , Ford , GM , Earnings/Financials With all the rescue/bailout talk going on here at Autoblog and, oh, just about everywhere else, you may find that it's tough to keep up with it all. Thankfully, the scribes over at Detroit Free Press have consolidated the discussion down to one easy-to-read but tough-to-comprehend figure: $97.4 billion. That's the total you get when adding up the initial $25.4 billion that automakers were promised to help retool their plants to build more fuel efficient cars; the $25.5 billion that auto suppliers have banded together to seek from the Feds and the $39 billion in loans that General Motors and Chrysler have requested from the feds to stave off a worst case scenario. Of that $97.4 billion, a total of $24.9 billion has already been paid out to General Motors, GMAC, Chrysler and Chrysler Financial. If the entire amount were paid out, every American would then have contributed $874 to the auto rescue/bailout...
|
-
|
Filed under: Government/Legal , Chrysler, LLC. , GM , Earnings/Financials , UAW/Unions While there have been rumors and suggested candidates floated for the so-called federal "car czar" post, it now no longer looks like that position will be filled. That's because President Barack Obama has apparently gone cold on the idea. Instead, new reports suggest that he will look to a select group of senior economic advisers for guidance. In lieu of appointing a single authority to help guide the restructuring of the Detroit Three, a senior adviser is suggesting that Obama instead plans to look to Treasury Secretary, Timothy F. Geithner; National Economic Council chairman Lawrence H. Summers, and Ron Bloom, a labor union and corporate restructuring expert. The three men will work with a presidential auto industry oversight panel, with Obama "reserving for himself any decision on the viability of GM and Chrysler." The aforementioned panel will be known as the Presidential Task...
|
-
|
Filed under: Government/Legal , Chrysler, LLC. , GM Detroit's danse macabre on Capitol Hill continues this week, as General Motors and Chrysler prepare to unveil their so-called "viability plans" to the Treasury department in order to gain access to additional taxpayer funds. Without additional bailout money, neither company is in a position to continue existing on its own, making bankruptcy the logical next step. The Wall Street Journal reported yesterday that General Motors, once very outspoken against the mere concept of the B-word, may now actually present it as an option - assuming the federal government would be willing to bankroll the debtor-in-possession financing that would need to accompany a Chapter 11 filing. According to the Journal, in this scenario, GM's "viable assets " (unspecified U.S. brands and its international ops) would then be reorganized into a new company. Everything else would get liquidated or sold off in bankruptcy court. While no...
|
More Posts Next page »
|
|
|